JLR (Jaguar Land Rover) scraps plans to build EVs in India with Tata Motors as it finds it too expensive, pushing back both brands’ electrification timetables.
Jaguar Land Rover (JLR) has put its India EV manufacturing plans with Tata Motors on hold, as reported by Reuters. The move is a major departure for both companies, which had agreed to work together on the development of EVs based on JLR’s Electrified Modular Architecture (EMA) platform at Tata’s recently announced plant in Tamil Nadu. This plan was designed for global markets, though the plans are now on hold. However, economic reality was no match for ambition, and the project was cancelled, people familiar with the matter tell me.
Cost Issues
The main problem that caused the project to be shelved was that it was impossible to achieve an appropriate balance between cost and quality when purchasing components for EVs locally. JLR had expected to use local suppliers in a bid to lower production costs, however, it appears they couldn’t provide the required quality for the luxury carmaker’s requirements. Against these headwinds, JLR terminated talks with the suppliers when it was made clear that the cost structure was unsustainable to pursue the plan.
Impact Plant
When at full capacity in 5 to 7 years, the new factory in Tamil Nadu was expected to produce over 250,000 units a year. The plant was meant to be a key element of the companies’ plans to boost EV production in India and serve the global market. This plan had hit a snag due to a particular sticking point in negotiations between JLR and its local suppliers, which begs the question of whether the Tata Motors and JLR batch of production strategy is in severe jeopardy.
Supplier Talks
This is why, in November last year, JLR held a meeting with local suppliers in Mumbai to explore what sort of parts would be able to source for the EVs. At this meeting, the suppliers were requested to submit their initial pricing data for each of the components required in the cars. However, discussions were put on hold following this meeting, a decisive setback for establishing the partnership. Formerly known as Jaguar Land Rover, securing the pragmatic suppliers needed to hit the price-quality curve for components has slowed the launch of JLR EVs and put the wider project on hold.
Tata Delay
Tata Motors is also reeling from this setback, not just JLR. Mitsubishi’s line of premium electric vehicles, called the Avinya range, was scheduled to launch in 2025. These vehicles were supposed to use the same EMA platform as JLR’s EVs, yielding economies of scale for both companies. But with the manufacturing plans suspended, the timeline for Tata’s Avinya models entering production is now up in the air.
The Avinya’s first model, originally planned for a 2025 release, now seems likely to be postponed. Tata Motors introduced the second model in the Avinya family, the Avinya X, in January and has since suggested that the original model could now arrive in 2026. However, there’s an expectation that the timeline for Tata’s EVs has now been pushed back even further, following the new challenges that Tata faces to fit in with JLR’s updated strategy.
Design Changes
Consequently, Tata Motors is now said to be realigning its plans for the Avinya range as a result of the dissolution of the partnership with JLR. The revisions are required since the company had at first found certain of their designs and bit sourcing dependent on the joint production agreement with JLR. Tata’s EV unit had aimed to solidify supplier agreements by the end of January, but after suspending the JLR collaboration, Tata is reassessing its plans.
These delays are more than just a timeline for these particular models. The times are moving towards a stronger hold of electric vehicles in the Indian market, and expectations were high from the Tata and JLR collaboration. The postponement of these plans could dent not only Tata and JLR’s push in the EV space but India’s wider aspiration to be an EV production hub.
Future Plans
Here’s what Tata Motors said in response to these growing concerns: “Timelines for production, as well as the models to be built at (the Tamil Nadu plant), will be aligned with the overall strategies of Tata and JLR. It added that it would make decisions in line with the requirements of the market and move forward to ensure that both Tata and JLR meet their targets in the Indian market and other markets, notwithstanding these unforeseen roadblocks.
So, Tata Motors’ EV ambition in the country has taken a significant blow as Jaguar Land Rover (the UK carmaker) calls off all plans of manufacturing electric vehicles in India. Challenges in sourcing parts at the right cost and quality have thrown a spanner into both the timelines of JLR’s and Tata’s electric vehicle programs. As Tata’s Avinya range of EVs currently undergoes delays and tweaks, the path forward just became longer and more cumbersome than it might have first seemed. Nonetheless, both companies plan to focus on syncing up their respective plans and developing new strategies to keep up in the fast-growing EV sector.
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