LONDON -- Jaguar Land Rover is making a multi-million-pound investment to build electric vehicles in its home market, in a major boost to a sector hit by a slump in diesel sales and Brexit uncertainty.
The automaker is undergoing a turnaround designed to offer an electrified option to all of its new models from next year as it seeks to move away from its reliance on diesel vehicles which are being increasingly shunned by buyers.
JLR will make a range of electrified vehicles at its Castle Bromwich plant in central England, beginning with a full-electric version of Jaguar's flagship luxury sedan, the XJ.
"The future of mobility is electric and, as a visionary British company, we are committed to making our next generation of zero-emission vehicles in the UK," CEO Ralf Speth said in a statement on Friday.
JLR has long warned about the dangers of a no-deal Brexit and the need to maintain frictionless trade with the European Union, echoing fears in the sector that just-in-time production could be hit by customs delays and additional bureaucracy.
But it has signed a deal with workers at the Castle Bromwich factory to go from a 5-day to a 4-day working week with the same number of hours which should allow the plant to operate more efficiently.
Three of JLR's four European car plants are in Britain, giving it limited capacity elsewhere on the continent. The other, in Slovakia, only opened last year. More basic autos are being moved to the lower-cost factory in Slovakia, which took over production of the Land Rover Discovery last year and will also make the revived version of the brand’s original Defender model.
The Jaguar I-Pace SUV, the automaker's first all-electric car, is built by Magna Steyr in Austria
"We are making this investment because the ongoing Brexit uncertainty has left us with no choice, we had to act, for our employees and our business," JLR said. "We are committed to the UK as our home and will fight to stay here but we need the right deal."
Work will commence this month at the Castle Bromwich plant on facilities and technology that will allow diesel and gasoline vehicles to be produced alongside full-electric and hybrid models.
JLR in January confirmed plans to locate a new battery assembly center at Hams Hall, also in the English Midlands. The site will become operational in 2020 with annual capacity for 150,000 units. The company also has an engine plant in nearby Wolverhampton that it says will power the next generation of Jaguar and Land Rover models.
Friday's investment announcement comes after a turbulent few months for the automaker which announced around 4,500 job cuts earlier in January and posted a 3.66 billion-pound ($4.5 billion) loss in 2018/19.
JLR also called on the government to bring giga-scale battery production to the country so that Britain is not left behind in the rush to produce low and zero-emissions vehicles and technology.
Britain's Business Secretary Greg Clark called the Castle Bromwich decision a “vote of confidence” in the UK auto sector that would put Britain at the forefront of electric-vehicle technology.
In June, JLR said it will partner with BMW for next-generation electric motors, transmission and power electronics. A joint team of BMW and Jaguar Land Rover experts located in Munich will be tasked with further developing BMW's fifth-generation eDrive technology that will debut this year on the BMW iX3 battery-powered SUV.
Bloomberg contributed to this report
