The chief executive of Jaguar Land Rover has said the future of the carmaker’s UK factories will not come under threat even if it has to source electric car batteries from Europe.
The comments came amid closely watched negotiations between JLR’s owner, the Indian conglomerate Tata, and the governments of the UK and Spain over where to build a “gigafactory” capable of manufacturing hundreds of thousands car batteries a year.
Tata has asked for hundreds of millions of pounds of government support.
Adrian Mardell, JLR’s chief executive, on Friday said Tata was “looking at the final determination” on where to build, but that the decision could go against the UK if there were a “cost disadvantage” compared with other locations.
Many executives in the UK car industry say the failure to attract more gigafactories could leave the country falling behind in the race to build electric vehicles and create secure manufacturing jobs. Mardell said it “would be wonderful” if the factory were in the UK, but that it was “not a threat to us” if JLR were to source batteries from elsewhere in Europe.
“I don’t believe it will impact where we build models,” he said, adding the company was committed to the UK.
However, he said he believed European carmakers will struggle to find enough batteries made within the UK or EU to meet increasingly strict requirements, known as rules of origin, on the proportion of parts sourced from within the region.
Mardell’s comments came as the carmaker revealed it lost £64m in its latest financial year, although it performed much better in recent months as the global shortage in computer chips eased.
It was the second consecutive annual loss for the carmaker, but its fortunes improved over the winter, and it made a profit before tax and exceptional items of £368m in the first three months of 2023. The carmaker expects to make a profit in the year to March 2024, even as it invests £15bn over five years to upgrade its plants and catch up with rivals in the race to produce electric vehicles.
Mardell cautioned that the microchip supply shortages – particularly for the most advanced chips – were not over, and the company was also affected by problems obtaining replacement tools for its factory.
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In the first three months of the 2023, JLR sold 94,649 cars (excluding its joint venture in China). That was an increase of 19% compared with the last three months of 2022 and up 24% compared with the same quarter a year ago.
Mardell also noted that the Land Rover logo will remain on vehicles and at dealers, after the company last month suggested it would downplay the historic marque in favour of the names of different models: Range Rover, Defender, Discovery and Jaguar.
