Government Approves £500m Loan To JRL For EV Manufacturing
The government appears committed to its electrification plans, as Theresa May approves £500m loan guarantee to Jaguar Land Rover (JLR). It comes at a time when the automaker has been experiencing declining global sales…
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JLR is due to receive £500 million as part of a government loan guarantee. The catch? It needs to be invested in the manufacture of electric vehicles. UK Export Finance will provide the guarantee; meaning that, should the company default on repayments, the government will act as its guarantor. It’s likely that the money will go towards the automaker’s new production facility in Castle Bromwich. The site will be the centre of production for the all-electric XJ saloon. It’s JLR’s answer to the Tesla Model S and the Porsche Taycan.
Whilst not a loan in the typical sense, it’ll make it easy for the company to secure credit and direct funding in order to “support the company’s design and manufacture of the next generation of electric vehicles and its export activities”. According to UK Export Finance, which is the government’s export credit agency, it’s working to “ensure no viable UK export fails for lack of finance or insurance, while operating at no net cost to the taxpayer.”
A New Direction For JLR
Jaguar is frantically readjusting its business model towards electric vehicles. It’s not hard to see why. Most of its models are diesel-centric, and sales of the powertrain have collapsed in light of Dieselgate. Its largest market, China, has also experienced major setbacks and its reputation in the country has suffered due to production problems. All of this is, of course, topped off with Brexit uncertainty. The result has been 4,500 job cuts out of a total of 40,000. But there may be light at the end of the tunnel for JLR; and it looks as though it’ll be powered by electricity. It’s pledged to invest £1 billion in manufacturing and developing electric vehicles on top of the government’s guarantee. It’s also agitating for a UK-based ‘giga factory’ in North Warwickshire, so that the home market has access to vital batteries.
Whilst Jaguar’s current position is a tenuous one, it seems that the automaker is acting swiftly and decisively. It’s lagged behind many of its competitors, but now it seems to be committing wholeheartedly to electric vehicles and the associated technologies. Whether the move will prove a success, or whether it’s simply too late, remains to be seen. One way or another, tens of thousands of jobs and a significant portion of the nation’s economy will be hoping for the former.
Jaguar Land Rover Pledges £1 Billion To UK Car Industry: https://www.autoservefleet.co.uk/latest-news/jaguar-land-rover-pledges-1-billion/
JLR Develops New Mood Tracking Technology For Its Cars: http://autoserve.co.uk/motoring-news/jlr-new-mood-tracking-technology/