Business

JLR to make Jaguar brand electric-only by 2025

Jaguar Land Rover, the UK-based carmaker, will make its Jaguar brand electric-only by 2025 and abandon petrol vehicles entirely in the middle of the next decade as part of a set of sweeping changes brought in by its new chief executive.

The company, which is owned by the Indian conglomerate Tata, will eliminate the internal combustion engine for its struggling Jaguar brand by 2025, as JLR aims to achieve net zero carbon emissions by 2039.

The more profitable Land Rover brand will launch six pure electric cars within the next five years, although it will continue to offer hybrid cars combining internal combustion engines with batteries until about 2036.

JLR, which employs 30,000 people in the UK, will also “substantially reduce and rationalise” its UK management. It did not reveal how many job losses were planned.

None of JLR’s main factories will close. However, Castle Bromwich, a West Midlands plant whose future has been in doubt as production slowed, will not build a previously announced electric version of Jaguar’s flagship XJ, or any other new models as it steps back from being a mass-production plant. Instead, Castle Bromwich will produce existing models only, and JLR will gradually consolidate other operations scattered around the West Midlands to the factory. Production of all Jaguar models will be concentrated in a Solihull plant.

The new strategy is the first public statement of intent by Thierry Bolloré, a former boss of France’s Renault, since he was appointed chief executive of JLR in July.

Although the company returned to profit in the last quarter of 2020, it struggled more than some rivals during 2020 as carmakers faced reduced sales from the coronavirus pandemic, heavy electric technology investments and disruption at the border before the Brexit deal.

JLR slipped behind Nissan as the largest manufacturer of cars in the UK in 2020, when it made 244,000 vehicles, but Bolloré said the company would target quality and profits over volume.

He faced the task of accelerating Jaguar Land Rover’s move to battery electric vehicles to meet the UK government’s ban on pure internal combustion engine cars by 2030. JLR has already garnered high praise for its sole pure electric model, the Jaguar I-Pace SUV, but that car is built in Austria by a contractor, meaning JLR still lacks in-house electric car manufacturing expertise.

It will attempt to rectify that with annual investments of £2.5bn in research and development of new electric technologies, including work on hydrogen fuel cell vehicles.

Matthias Schmidt, an independent automotive analyst, said JLR’s decision to abandon petrol and diesel by 2036 was roughly in line with EU emissions limits that are effectively impossible to meet with internal combustion engines.

JLR has already paid a fine of £35m for 2020 after missing its emissions reduction target. A loophole making emissions targets easier for smaller manufacturers will be gradually closed from 2026.

Unite, the trade union representing large numbers of JLR workers, welcomed the electric vehicle plans but said it was not offering unconditional support.

Des Quinn, Unite’s national officer for the automotive industries, said: “Assurances of no plant closures and no compulsory job losses have been sought and given, and it is on this basis only that we will work with the company to meet the challenges of the future.”

Bolloré said the restructuring would be focused on “dramatically reducing the layers of management in the company”, as well as simplifying its purchasing from suppliers and making some components itself.

He said JLR was “human-sized among giants” of the automotive industry but insisted the company could use that to its advantage by acting more like an agile technology company. Bolloré has already moved his management team out of its previous base in Whitley to Gaydon, further south of Coventry, to be nearer to the company’s design hub.

The biggest challenge for the carmaker’s net zero carbon ambition was cutting the third of total emissions that came from suppliers, many of which are small businesses in the West Midlands, Bolloré said.

However, he insisted that JLR had an opportunity to build greener brands that will appeal to wealthy customers. A new Range Rover starts at more than £83,000, although cheaper Land Rovers retail at about £32,000.

Electric technology “embodies everything that a modern luxury vehicle should be,” Bolloré said. “Luxury is clean.”

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