Autos

Why Jaguar Land Rover needs more electric cars very soon


There was a lot said in a debut press conference conducted by Jaguar Land Rover CEO Thierry Bolloré this week.

It was the first time Mr Bolloré had addressed the word’s media since taking over from Ralf Speth last autumn and he announced some big changes.

In the wake of the Monday briefing the company has revealed it plans to cut 2,000 non-production jobs over the next 12 months..

Monday saw the former Renault boss present his vision for Jaguar Land Rover going forward and indicated the company would step back from a push for volume and instead focus on quality.

He talked of pulling the plug on the anticipated Jaguar XJ, a restructure which will see management jobs cut and Jaguar production moving from Castle Bromwich to Solihull – but the key theme was electrification.

Mr Bolloré announced that Jaguar would become an all-electric brand and that both brands will move towards a zero carbon future.

He said Land Rover would unveil six new all-electric models over the next five years, the first one arriving in 2024, and that Jaguar will undergo a “renaissance” as a pure electric luxury brand with a new portfolio of vehicles.

By 2030, which the UK Government has decreed will be the cut-off for manufacturing pure petrol and diesel internal combustion engines (ICEs), Jaguar and Land Rover will offer pure electric power.

By this time Mr Bolloré said all Jaguar vehicles would be electric and 60% of Land Rovers.

Some, but not all, non-electric Land Rovers at this point will be hybrids which combine ICE and battery power.

So, what will Jaguar Land Rover’s electric future look like?

The Coventry car maker currently has just one all-electric model in the shape of the Jaguar I-Pace and it has a lot to do, particularly if it wants to even partially keep pace with Tesla.

CoventryLive caught up with Dr Charles Tennant, who has been following the company’s fortunes and its journey towards electrification closely.

Dr Tennant is a former chief engineer at Land Rover and also sat on the board at Tata Technologies.



Dr Charles Tennant

The journey to electrification is essential for all car makers, not just Jaguar Land Rover. Why is that?

Charles Tennant (CT): “Car adverts on television and the internet are extolling manufacturers’ growing stable of electric cars as the industry faces up to an existential change that is accelerating.

“And with good reason as many cities in the UK discourage high-emission (particularly older) vehicles from entering by charging from £12.50 per day.

“These so-called Low Emission Zones (LEZ) already exist in eight cities such as London, Birmingham, Norwich and Glasgow; and more will follow this trend.

“There are already 15 European countries operating LEZs in more than 200 cities.

“With transport contributing 30% of Europe’s total carbon dioxide (CO2) emissions and passenger cars being a major polluter accounting around 60% of that it is easy to see why cars with combustion engines are being penalised.

“There are only two ways to reduce CO2 emissions from cars – either make them more efficient or change the fuel used.

“In Europe over the past 20 years the drive for efficiency has seen the mass adoption of diesel engines to achieve stringent EU targets for CO2 reduction – a typical car in 2006 emitted 160g/km whereas the 2020 target was 95g/km (a 40% reduction).

“But this is a law of diminishing returns as making combustion engines compliant with punitive targets is technically challenging and expensive. And anyway, the VW ‘Dieselgate’ debacle has demonised diesel engines that were once seen as the future, hence petrol engines have recently made a significant return.

“The panacea for reducing emissions further is now alternative fuelled vehicles (AFV) which is an umbrella term for cars that do not solely use conventional petrol or diesel engines.”

What are the vehicle options available be they all-electric, hybrid or whatever?

CT: “These include hybrid (which combines a petrol or diesel engine with an electric motor and battery to power the vehicle at low speeds up to about 25mph when the engine takes over and simultaneously recharges the battery); plug-in hybrid termed PHEV (same as hybrid but can also be recharged from an electric outlet); mild hybrid termed MHEV (has a motor that merely assists a petrol or diesel engines power); battery electric vehicle termed BEV (which runs solely on electricity and can only be charged up from an electric outlet and is effectively a zero emission vehicle termed ZEV).

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“The electric outlet for a BEV can be either a home charging point and/or a pay-as-you go charging station (like conventional petrol stations).

“There are also vehicles that mix hydrogen with oxygen in a fuel cell to produce electricity only emitting water from their exhaust. Although rare (only two are available in the UK right now – the Toyota Mirai and Hyundai ix35) hydrogen cars are expected to play a growing role in the future.”

Is it simply the case that electric cars are better for the planet?

CT: “Of course, there are those that say electric cars are less environmentally friendly than combustion engine cars if you consider their production, disposal, and electricity production for charging electric batteries; and this may be the case but as the share of electricity from renewable sources increases this argument is less compelling.

“Even the land of the gas guzzler is starting to wake up, where the new American Joe Biden administration is aiming to replace the federal government’s fleet of 650,000 vehicles with all-electric models and their largest car market California has ambitious plans to enforce all cars to be zero emission vehicles (ZEV) by 2035.”

What is the Jaguar Land Rover story?

CT: “Jaguar Land Rover bet heavily on diesel fuel to drive their large sport utility vehicles (SUVs), which have higher weight and drag so need more energy to propel them, to the extent that until recently 90% of their vehicles ran on diesel.

“The justification being that it is difficult to produce large SUVs which are fully electric and have the long range expected by customers because it is physically and economically challenging to package a large enough battery.

“But they needed to do something as diesel sales tumbled and have since invested billions of pounds on hybrid systems in a race to catch up with rivals having lagged behind for years.

“They have also successfully developed one BEV car – the Jaguar I-Pace which was well received and won awards – but are now under pressure to accelerate their electrification transformation.

“With good reason too as the UK Government has brought forward its ban on diesel and petrol vehicles to 2030 representing roughly 20% of all Jaguar Land Rover sales.

“Of course, other global markets will allow petrol and diesel sales post 2030 so JLR will continue to produce some combustion engine vehicles, albeit a smaller overall proportion of them.”



The BMW Concept i4

What are other companies doing?

CT: “Other companies have already announced their plans.

“Bentley are switching to a fully electric vehicle line-up by 2030, Mercedes-Benz have said they will earn as much from electric cars as combustion engine models by the end of this decade and BMW is to launch nine new electric cars by 2025.

“And of course VW has trail blazed with its MEB electric vehicle platform already producing the European bestselling ID.3 car, and is planning to invest another 73 billion euros over the next five years in its quest to overtake Tesla by 2025, to become the world’s biggest full-electric vehicle maker.

Has Jaguar Land Rover changed course at all and what does it need to do?

CT: “Back in 2019 Jaguar announced a £1 billion investment to build electric cars in Britain at their factory in Castle Bromwich seen then as a major boost for the UK car industry, which was already reeling from an 80% investment slump and plant closures by Ford and Honda amid falling production output.

“But Jaguar then postponed its first planned large XJ electric car programme last year as the company tightened its purse strings and capped investment.

“To be fair Jaguar Land Rover have been quite nimble in switching away from diesel-powered vehicles where in the last quarter of 2020 they sold 7,807 Jaguar I-Pace BEV cars (up 69.3%) meaning 6.1% were fully electric and 53% of all sales offered some form of electrification, albeit predominantly mild hybrids at 41.4% with just 5.5% being plug-in hybrids.

“Even so their vehicle range now includes one battery electric, eight plug-in hybrid and eleven mild hybrids.

“But with a global race now on to produce more electric cars Jaguar Land Rover have recognised the need to go further and faster and if we look at the figures it’s easy to see why.

Below: Footage of Jaguar’s electric journey

“Worldwide sales of electric cars surged by 43% to more than three million in a market that declined by 20%.

“Where Western Europe is now the largest market for electric vehicles with a total of 1.33 million such cars sold in 2020 (a 12.4% market share) with pure electric sales doubling to 727,927 and hybrids making up the balance.

“With another 150 new BEV and PHEV models expected in 2021 analysts are forecasting European sales of 4.6 million next year.

“In the UK car sales in 2020 slumped (in part due to coronavirus) by 29% to 1,631,064 cars – the lowest level since 1992 – yet sales of electric and hybrid cars made up a higher proportion of cars sold to date with pure-electric cars at 6.6% (108,205 sales), hybrids at 6.8% (110,717 sales) and plug-in hybrids at 4.1% (66,877 sales).

“At the same time diesel sales plunged by 55% to a lowly 16% market share (261,772 sales) and Jaguar Land Rover production at its three car plants fell by 37% to 244,000 cars, meaning it lost its coveted top spot as the UK’s largest car maker being pipped to the post by Nissan whose Sunderland factory produced 246,000.

“Whilst the higher purchase price of electric cars and range anxiety are still significant barriers to electric car sales it is expected that more affordable cars such as the VW ID.3, Renault Zoe and Kia Niro; and government incentives will drive sales growth.”



Jaguar Land Rover CEO Thierry Bolloré. Image: Joel Saget/AFP via Getty Images)

Thierry Bolloré announced his vision for the company this week with a particular focus on Jaguar. What is likely to happen next?

CT:“Jaguar Land Rover have at last disclosed their future electrification plans and a desperately needed rejuvenation of the Jaguar brand – which accounted for just 16% of the company’s sales in the October to December quarter – is at the top of the agenda, and as we now know it has been confirmed will go fully electric from 2025.

“But they are also planning a major revision to their vehicle platform plans; where once the aluminium Modular Longitudinal Architecture (MLA) was to be used across Jaguar and Land Rover it will now only used by Land Rover (with an electric version as well).

“Jaguar will have its own bespoke electric vehicle platform, which is why the electric XJ car was cancelled even though it was almost production ready (it had been designed off the MLA platform). “

Also, we now know that when the current Jaguar XE and XF saloons and F-Type sports cars reach their end-of-life in the next few years there will be no further vehicle production at Castle Bromwich.

“Their recently board appointed chief creative officer Gerry McGovern has already gone on record saying he wants to modernise the design of Jaguar cars and make the sports car brand wonderful again.

“He further stated that Jaguar is “a unique brand with incredible pedigree and a lot of potential”. So we can expect a new house style for Jaguar.

“Let us hope that his hubris can translate into delivery – after all he had the Midas touch as head of design at Land Rover.

“Jaguar will now plough on developing their next set of smaller electric cars whether they be saloons or SUVs – or even a baby Jaguar. Whilst the XE and XF Jaguar saloons have suffered miserable sales (only managing 27,609 in 2020) Tesla has already shown that there is a market for high-end luxury electric saloon cars with their Model 3 selling an incredible 365,240 last year, which was 12% of the global electric car market. And the recently launched Audi e-Tron sold an impressive 47,928.”

And what of Land Rover?

CT: “Meanwhile Land Rover will press on with their transition to a majority of electric cars too – albeit at a slower pace than Jaguar – and I envisage that their first will be the so-called Road Rover, as a fourth brand within their portfolio of Range Rover, Discovery and Defender.

“I imagine it will be developed towards on-road dynamic performance with a more than likely ‘shooting brake’ silhouette to differentiate it.

“As a pure electric vehicle, it will be engineered off the Modular Longitudinal Architecture (MLA) aluminium platform with twin electric motors and all-wheel drive, with height adjustable suspension giving some off-road capability.

“To compete it will need a 300-mile plus range and sub five second 0 to 60mph performance.

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“As a medium sized SUV, it is expected to sit between the Evoque and Velar, but with a lower roofline and smaller frontal area than both in order to optimise economy and range.

“There is also talk of a baby Land Rover priced at around £25,000 which should sell well as a battery electric vehicle.

“Also Land Rover are now going ahead with plans for hydrogen fuel cells to power their larger SUVs for which battery only propulsion is hampered by their weight.”

And what about the company as a whole?

CT: “Of course, amongst all this Jaguar Land Rover may yet announce more collaboration with other manufacturers to share costs and improve scale or extend the BMW deal (which supplies engines and electric drive unit technology) to include sharing of vehicle platforms.

“Although there was no mention of this at the press conference, where instead they said that they will seek opportunities within the larger Tata group of companies – vehicle technology with Tata Motors and software with Tata Consultancy Services.

“And there will be some rationalisation of the product range – Jaguar Land Rover currently produce 14 cars – three saloons, the F-Type sports car with the rest being SUVs.

“This proliferation of fashionable SUVs has been profitable but problematic as Jaguar and Land Rover SUV models compete in similar market segments with each other resulting in what is known as sales cannibalisation, so some may be phased out to tidy up the range.

“Then there is the question of production where JLR have too many factories and spare capacity at their low-cost Slovakia facility.

“They have now said that Castle Bromwich will not be producing vehicles in the future and they are also are aiming to streamline non-manufacturing management to further reduce fixed costs.

“But a big issue is quality which for Jaguar Land Rover is an Achilles heel, and the company needs to work hard on this to engineer inherent reliability into their new electric cars.

“But at last, they are explicitly stating that quality is at the top of their agenda, and they now have a board member responsible for it.

“Amongst all of this there is a big caveat for UK-based auto makers aiming for higher production of battery electric vehicles, and that is an urgent need for gigafactories to produce the batteries where Britain is a distinct laggard.

“Both China and the US have built up sizable production pipelines while the European Union is expected to build at least eleven gigafactories by 2030.

“Also, by 2026 electric vehicles built by UK firms must have at least 50% local content or face crippling tariffs as set out in the Brexit trade deal with the EU.

“To protect future UK electric vehicle production the forecast demand for batteries by 2025 is two gigafactories and eight by 2040.

“The UK Government has committed up to £1 billion to support the electrification of UK vehicles and their supply chains but this work needs to get a pace on.

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“So, the recent announcements of plans for gigafactories in Blythe and Coventry are most welcome and are mission critical now.

“I have already said that 2021 could be a very demanding but fruitful year for Jaguar Land Rover, especially if they continue to deliver a strong product mix of higher margin sales at the 500,000 annual volume level.

“Well, they have right-sized the company over the past two years with £5 billion of cost savings and the final quarter of 2020 roared to an impressive £439m pre-tax profit with improved cash flow of £562m. “With investment now capped at £2.5 billion per year there is a lot to do and every penny spent must count now in delivering the new product plan.

“Now they have committed to develop more electric cars soon to future-proof the company as global markets move further away from using combustion engines to power cars.

“If they can create a future stable of high-end luxury vehicles with inherent reliability that deliver high profit margin sales, they could be onto a winner.”

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