Jaguar Land Rover (JLR) has decided against manufacturing electric vehicles at Tata Motors' upcoming $1 billion facility in southern India due to challenges in balancing cost and quality for locally sourced EV components. Additionally, the decision aligns with the broader trend of slowing demand for electric vehicles worldwide.

The shift in strategy is impacting Tata Passenger Electric Mobility, Tata Motors' electric vehicle division, as it delays the introduction of its premium Avinya models. These vehicles were intended to be built on the same platform as JLR’s electric models, with certain components jointly sourced.

Construction of the new factory began in September, designed to manufacture a variety of vehicles, including EVs. At full capacity within five to seven years, it is expected to produce over 250,000 cars annually. The initial plan involved JLR producing more than 70,000 electric vehicles and Tata’s EV unit manufacturing around 25,000 at the facility.

The decision comes as global carmakers reassess their electrification strategies due to increasing competition from Chinese manufacturers, growing preference for hybrid models, and adjustments in government regulations and EV sales targets. Tata Motors, India's leading EV manufacturer, faces rising competition from companies such as JSW MG Motor and Mahindra & Mahindra, which have introduced advanced models with longer driving ranges. Tesla is also preparing to enter the Indian market.

JLR had previously engaged with local suppliers in Mumbai in November, exploring potential component sourcing. However, discussions have now been halted. Tata’s EV division, which initially planned to finalize supplier agreements by January, is now revising its designs due to the economic feasibility challenges posed by JLR’s decision. As a result, the launch of the Avinya EV, initially scheduled for 2024, has been postponed to 2026-2027, with potential for further delays.

News courtesy: Business Standard