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Jaguar Land Rover boosts investment to catch up in EV race

© Reuters. FILE PHOTO: The Jaguar Land Rover logo is seen at a dealership, following the outbreak of the coronavirus disease (COVID-19), Milton Keynes, Britain, June 1, 2020. REUTERS/Andrew Boyers/File Photo
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By Nick Carey and Sachin Ravikumar

LONDON (Reuters) -Jaguar Land Rover (JLR) will invest 15 billion pounds ($19 billion) over the next five years in electric vehicles (EVs) and promised on Wednesday to deliver a new electric Jaguar in 2025 as the British luxury carmaker plays catch-up with rivals.

JLR, which is owned by India’s Tata Motors (NYSE:TTM), said in early 2021 that Jaguar would be entirely electric from 2025, but on Wednesday could not confirm when production of its fossil-fuel models would end.

The carmaker previously said it would invest 2.5 billion pounds a year on electrification.

The pressure on carmakers to electrify quickly is picking up, especially in China where the competition is moving faster and the pressure to cut prices is getting more intense.

Premium German rivals Mercedes and BMW have already rolled out a number of electric models – BMW alone has promised 11 new EV models in China by the end of the year.

JLR launched its well received electric I-Pace in 2018, but has since not launched any other zero-emission models.

The British carmaker said its Halewood plant in northwest England would become an all-electric manufacturing facility.

JLR also plans a new all-electric Range Rover SUV in 2025 and order books for that vehicle would open later this year.

The new Jaguar will be built at the carmaker’s Solihull plant in central England and will be the first of three new electric models.

JLR reported a quarterly profit in January, but has been hit harder than other major carmakers by the pandemic and the semiconductor chip shortage – as larger rivals have greater leverage on suppliers.

In its fiscal 2022 year ending March 31 last year, JLR sold 376,381 units, 39% below its fiscal 2018 year – the last year for which it reported a full-year profit.

JLR also said it was targeting a double-digit margin for earnings before interest and taxes (EBIT) by 2026. Its last quarterly EBIT margin – a key measure of profitability – was 3.7%.

JLR’s owner Tata is also considering building an EV battery plant in Spain or Britain a source has told Reuters, which would supply JLR.

($1 = 0.8042 pounds)

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