Jaguar Land Rover to build electric vehicle in China to keep up with the competition
Beijing — Jaguar Land Rover (JLR) is planning to build an electric vehicle (EV) in China as the iconic British manufacturer steps up its game in a fast-growing market into which other luxury marques, from Audi to Mercedes-Benz, are ploughing money to gain leadership.
The vehicle maker, which already makes the petrol-powered E-Pace compact SUV locally with its Chinese partner Chery Automobile, will try to fully use its current capability in China to produce an EV, Murray Dietsch, president of the joint venture, said in an interview on Wednesday in the eastern Chinese city of Changshu. The details will be disclosed within a year, he said.
"Our expectation is the penetration of EVs will continue to grow more than linearly," Dietsch said. "With the combination of the enhancement in the SUV market and the expectation of higher penetration of battery-powered EVs, you will see more battery-powered electric SUVs in the market in the future."
JLR, owned by Tata Motors, is looking to tap growing demand for EVs in China as the government promotes zero-emission automobiles to fight pollution and cut oil imports. In the race for market share, it faces formidable rivals. Billionaire Elon Musk is already preparing to set up a local Tesla factory, while Volkswagen’s Audi plans five new-energy models for the country by 2022, and Daimler is spending €655m to make Mercedes EVs with a domestic partner.
China is moving to cap carbon emissions by 2030, which means vehicle makers will need battery-powered vehicles for the market. Sales of new-energy vehicles — a category that includes battery-powered, plug-in hybrid and fuel-cell automobiles — reached 777,000 units in 2017 and could surpass 1-million in 2018, according to estimates by the China Association of Automobile Manufacturers. The government’s target is 7-million vehicles a year by 2025.
"For the next three to five years, obviously our focus is getting ourselves ready for the policy changes on new-energy vehicles," Dietsch said. "We’ve got a very detailed plan for us to be able to comply as you expect."
As the Chinese market may be "more demanding" than the rest of the world, Chery Jaguar Land Rover Automotive will first introduce "derivatives" of vehicles here before they get launched elsewhere, Dietsch said. The partnership is boosting spending on research and development and also plans to produce one new vehicle in China annually over the next three to five years.
The joint venture is also working with battery maker Contemporary Amperex Technology in developing battery technologies and products together to lower costs, part of an effort to make EVs as profitable as conventional cars, Dietsch said.
European makers aren’t JLR’s only competitors. While the brand clocked a 23% jump in sales last year in China to 146,399 units, it is still trying to catch up with the American Cadillac that grew faster at 45%, selling 174,437 cars. It also needs to contend with some of the aspiring Chinese brands, such as Geely Automobile’s Lynk & Co.
With the E-Pace compact SUV added to its local portfolio, Dietsch expects sales of JLR in China to outpace the overall growth of the premium car segment, which is set to jump 15% to 18% this year.