JLR’s $3.5 bn plan to take all Jaguars, 60% Land Rovers electric by 2030February 15, 2021
All Jaguar models and six out of every ten Land Rover models will go electric by 2030, with the UK subsidiary of Tata Motors ditching the combustion engine in favour of zero-emission technology as part of the so-called ‘Reimagine’ strategy. Crafted by company’s newly appointed chief executive, Thierre Bollore, JLR will invest about 2.5 billion pounds ($3.5 billion) a year into electrification and related technologies, Bollore said in his maiden public address on Monday. The Land Rover line will get its first fully electric model in 2024, and by the following year, all Jaguar models will be entirely powered by batteries.
JLR will “reimagine the business, the two brands and the customer experience of tomorrow,” said Bollore, the former Renault SA chief who joined the UK carmaker in September. To execute the plan, JLR will empower a new centralized team to build and accelerate pioneering innovations in materiality, engineering, manufacturing, services and circular economy investments.
“The Reimagine strategy takes JLR on a significant path of acceleration in harmony with the vision and sustainability priorities of the wider Tata Group. Together, we will help Jaguar realise its potential, reinforce Land Rover’s timeless appeal and collectively become a symbol of a truly responsible business for its customers, society and the planet,” said N Chandrasekaran, chairman of Tata Sons, Tata Motors and Jaguar Land Rover Automotive plc in the statement.
The “Reimagine” plan also aims to deliver simplification and will include consolidation of platforms and models being produced per plant. The company hopes the approach will help rationalise sourcing and accelerate investments in local supply chains. JLR also plans to achieve net zero carbon emissions across its supply chain, products and operations by 2039.
All these initiatives will put JLR firmly on the path towards double-digit EBIT margins and positive cash flow, with an ambition to achieve positive cash net-of-debt by 2025, the statement said. Tata Motors investors cheered the announcement. Company’s shares closed at Rs 333.30 apiece. The benchmark Sensex rose 1.18 per cent to close at 52,154.13 points. “The electrification strategy augurs well for the company and will translate in enhancing appeal for its models globally. Aiming for the double digit Ebit margin will help JLR reduce debt and improve cash flow said Mitul Shah,” head of research at Reliance Securities.
Bollore’s decision to shift JLR away from the internal combustion engine is prompted by stricter emissions rules. Global carmakers from Volkswagen AG to Jaguar’s smaller rival Lotus Cars have been veering away from ICE and have announced plans to electrify their offerings.
Governments around the world are stepping up incentives for battery-powered vehicles and restricting gasoline cars.
JLR has had limited success selling EVs in the past years. The company introduced plug-in hybrid variants of models including the Range Rover Sport and new Defender, but its only fully electric vehicle is the I-Pace SUV, which it started selling in 2018.
The manufacturer failed to comply with Europe’s tougher carbon-dioxide rules last year and set aside 35 million pounds to pay for the resulting fines. The UK, its home market, will ban sales of gasoline and diesel cars from 2030, putting further pressure on legacy carmakers, Bloomberg reported.
While JLR will retain its plant and assembly facilities, it said it will “substantially reduce and rationalise” its non-manufacturing infrastructure in the U. K. The company is looking at opportunities to repurpose its Castle Bromwich plant in England, which makes the XE and XF sedans as well as the F-Type sports car. The site will produce the models until they’re phased out, Bollore said on a call with reporters, reported Bloomberg.
Meanwhile, Unite the union has broadly welcomed JLR’s strategy that does not include plant closures or compulsory job losses. Unite said that this is ‘good news in challenging economic times’ for the company’s estimated 40,000 UK employees.