BMW and JLR to jointly develop electric-car parts
BMW and Jaguar Land Rover, both under pressure to roll out zero-emission vehicles, say the alliance will lower the costs of developing electric cars
Frankfurt — On Wednesday, BMW and Jaguar Land Rover (JLR) said they will jointly develop electric motors, transmissions and power electronics, unveiling yet another industry alliance designed to lower the costs of developing electric cars.
Both car makers are under pressure to roll out zero-emission vehicles to meet stringent anti-pollution rules, but have struggled to maintain profit margins faced with the rising costs of making electric, connected and autonomous cars.
“Together, we have the opportunity to cater more effectively for customer needs by shortening development time and bringing vehicles and state-of-the-art technologies more rapidly to market,” said BMW board member Klaus Froehlich.
BMW and JLR said they will save costs through shared development, production planning and joint purchasing of electric-car components. Both companies will produce electric drivetrains in their own manufacturing facilities, BMW said.
The BMW-JLR pact comes as rivals Fiat Chrysler Automobiles (FCA) and Renault explore a $35bn tie-up of the Italian-American and French car-making groups.
Nick Rogers, JLR’s engineering director said, “We’ve proven we can build worl- beating electric cars but now we need to scale the technology to support the next generation of Jaguar and Land Rover products.”
BMW was in talks with rival Daimler about developing electric-car components but was also in discussions with JLR, a company it once owned, to explore an alliance on engines. BMW already has a deal to supply an eight-cylinder engine to JLR.
Car makers are increasingly open to sharing electric-car parts because the technology is expensive and because customers no longer buy a car based on what engine a vehicle has.
“Car makers are much less precious about sharing electric-car technology because it is much harder to create product differentiation with electric-car tech. They all accelerate fast, and everybody can do quality and ride and handling,” according to Carl-Peter Forster a former CEO of Tata Motors and a former BMW executive.
JLR is still run by former BMW managers, including Ralf Speth the company’s CEO, who spent 20 years at BMW prior to joining JLR, and Wolfgang Ziebart, the engineer who oversaw Jaguar’s iPace electric-car programme, who is a former head of research and development at BMW.
JLR said it will redouble efforts to cut costs after it posted a $4bn loss earlier this year, hit by a downturn in demand for SUVs in China and a regulatory clampdown on diesel emissions.
BMW bought Britain’s Rover Group, which included the Jaguar and Land Rover brands, for £800m in 1994 only to sell JLR to Ford in March 2000 for $2.7bn. In 2008, India’s Tata Group bought Jaguar and Land Rover from Ford for $2.3bn.