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EV sales still in limbo despite boost from JLR

Increased consumer take-up of EVs remains a challenge. The latest SMMT figures show a drop in EV registrations with the supply of vehicles and a lack of clarity on tax part of the problem – there are currently not enough electric powertrains being made.
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8 July 2019

JAGUAR Land Rover has revealed plans to manufacture a range of new electrified vehicles at its manufacturing plant in Castle Bromwich.

The announcement is the next step in delivering on the company’s commitment to offer customers electrified options for all new JLR models from 2020.

Chief Executive Ralf Speth said: The future of mobility is electric and we are committed to making our next generation of zero-emission vehicles in the UK.

“We are co-locating our electric vehicle manufacture, Electronic Drive Units and battery assembly to create a powerhouse of electrification in the Midlands.”

The first new electric car to be produced at the plant will be Jaguar’s flagship luxury saloon, the XJ.

The news was confirmed to workers at Castle Bromwich as production of the current XJ came to an end.

The new all-electric model will be created by the same team of designers and product development specialists responsible for delivering the Jaguar I_PACE electric SUV.

In January the company confirmed plans to bring battery and Electric Drive Unit (EDU) assembly to the Midlands with investment in new and existing facilities. These investments have been anticipated in the company’s previously communicated capital investment plans.

The new Battery Assembly Centre at Hams Hall, operational in 2020, will be the most innovative and technologically advanced in the UK with an installed capacity of 150,000 units.

Together with the Wolverhampton Engine Manufacturing Centre (EMC), home of Jaguar Land Rover’s global EDU production, these facilities will power the next generation of Jaguar and Land Rover models.

The extensive transformation of Castle Bromwich to become the UK’s first premium electrified vehicle plant will be the most significant in the plant’s history.

Later this month, work will begin to commence the installation of all-new facilities and technologies required to support Jaguar Land Rover’s next-generation Modular Longitudinal Architecture (MLA). Designed and engineered in-house, MLA enables flexible production of clean efficient diesel and petrol vehicles alongside full electric and hybrid models.

However increased consumer take-up remains a challenge.

The latest SMMT figures show a drop in EV registrations with the supply of vehicles part of the problem – there are currently not enough electric powertrains being made.

Ashley Barnett, Head of Consultancy at Lex Autolease, said: “Lack of future tax clarity is the main reason preventing fleet decision makers from committing to an electric future, so the government’s Draft Finance Bill is highly anticipated in the hope that we’ll finally find out what company car tax tables beyond 2020/1 will look like.

“That will be crucial for company car drivers, not only to resolve general uncertainty around benefit-in-kind tax thresholds, but more importantly, the long term sustainable fiscal support available for electric vehicles and plug-in hybrids.

“It’s company car drivers who typically adopt new, clean technologies before everyone else. They are first ones driving electric and alternatively-fuelled cars and in turn create a second-hand market for these kind of vehicles.

“Clarity around longer-term fiscal support will also give manufacturers the certainty they need that the UK is serious about a zero emission future, meaning they can confidently set about manufacturing the volume of vehicles needed.

“While it is positive to see the number of battery electric vehicles up 60% year on year, the reality is that this still only accounts for 0.9% market share.

“We remain a long way off the levels needed to meet Sadiq Khan’s target for London to have all new registrations to be zero emission by 2030, and the Committee for Climate Change ambitions that 100% of new registrations will be zero emission by as early as 2035.

“At the moment the reality is that, even though the number of new cars being registered is falling and fewer people are taking company cars, the number of cars on UK roads isn’t reducing. That means the proportion of older, dirtier cars is growing, which is completely at odds with the Government’s Road to Zero strategy.

“Clarity in the finance bill will hopefully demonstrate the commitment the UK has on delivering on the net zero carbon emissions by 2050.”

Karen Johnson, Head of Retail and Wholesale at Barclays Corporate Banking, said: “The first fall in alternatively fuelled vehicles for more than two years should make policymakers sit up and take note.

“There are two main factors hitting new car sales. One is the broader economic environment that is affecting consumer and business confidence across the retail sector, with big-ticket items particularly affected.

“The other is the continuing confusion around fuel types and the impact of new regulation on the future value of vehicles.

“People are having to guess what the next policy move will be and this is affecting the used car market, with some book values down in part due to fears about future prices if further regulatory changes are introduced. This has a knock-on effect on appetite for new vehicles.

“Steps to make our roads cleaner are essential, but as evidenced by falling AFV sales in June, unless the message around cleaner cars is clarified we won’t achieve real change.

“The industry needs to have access to the right incentives to encourage drivers to get their older, more polluting vehicles off the road and invest in new AFVs and cleaner petrol and diesel models.”

 

 

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Chris Wright

Chris Wright

Chris Wright has been covering the automotive industry nationally and internationally for 30 years. Following spells with consumer titles he became News Editor of Automotive Management (AM), Editor of Automotive International, International Editor for Detroit-based Automotive News, and Editor of Dealer Update. He has also co-authored several FT Management Reports and contributes regularly to Justauto.com

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