Prime Minister announces guarantee, which will help JLR secure loans to further develop electric vehicles
Jaguar Land Rover has received a £500-million loan guarantee from the government, after Theresa May hosted automotive industry heads at 10 Downing Street in her final days as Prime Minister.
The fund – while not a loan in itself – is a state-backed guarantee that will allow Jaguar Land Rover to easily secure credit and direct funding in order to “support the company’s design and manufacture of the next generation of electric vehicles and its export activities”. It effectively means that in the unlikely event that JLR were to default on repaying the loan, the government would step in.
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Earlier in the month, JLR announced its next-generation XJ luxury saloon would switch from petrol and diesel power to batteries and motors, and be built at the firm’s Castle Bromwich plant in the West Midlands.
The £500m guarantee is being issued by UK Export Finance, the government’s export credit agency, which aims to “ensure no viable UK export fails for lack of finance or insurance, while operating at no net cost to the taxpayer.”
Jaguar Land Rover has suffered a series of setbacks over the last year or so, writing down £3.1bn worth of assets in May, and announcing it would cull 4,500 jobs from its UK workforce of 40,000. The company has faced dwindling sales in the key Chinese market, as well as being challenged by Brexit headwinds, and a product line-up that has been previously dominated by out-of-favour diesel engines.
But the firm stole an early march on its key German rivals by bringing the all-electric I-Pace to market a year ahead of the Audi e-tron and Mercedes EQC, and JLR’s commitment to EVs has been underlined by plans to build a “giga-scale” battery plant at Hams Hall, North Warwickshire.
This loan guarantee announcement is echoed by the Government’s pledges on EVs and emissions, and the need to firm up commitment, investment and export opportunities in a post-Brexit UK.
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