Jaguar Land Rover to Increase Hybrid Production, Focus on US Growth

Jaguar Land Rover has said it will make more hybrid cars as part of an effort to focus on growth in the US, as Britain’s largest carmaker further rowed back on the transition away from fossil fuels.

The manufacturer told investors on Wednesday it would offer petrol and hybrid versions of new models, including smaller SUVs that had previously been planned to shift to all-electric sales.

It aims to make US sales equivalent to the current size of the business – a shift that implies a strategy of selling a further 250,000 cars to wealthy Americans.

Carmakers across the world have delayed their shift to EVs as governments dilute regulations or, in the case of the US under Donald Trump, removed nearly all incentives to sell battery cars.

As the world’s richest economy, the US has by far the most millionaires and billionaires capable of affording luxury vehicles such as JLR’s Range Rover, which starts at more than £107,000 ($143,000), and its smaller premium cars. Executives at JLR are hoping to win a share of an unprecedented wave of inherited money in the US in the coming decades.

PB Balaji, who took over as the chief executive of JLR last year, said: “To truly manifest the power of our brands, we will increase our focus on North America, our biggest market. The rising demand for luxury products coupled with the strong preference we see for our brands signals significant growth potential.

“Our aspiration, in the coming years, is to grow our US business to the size of the entire JLR business as it exists today.”

JLR, which has mostly recovered from last autumn’s crippling cyber-attack just before Balaji took over, said it will target double‑digit revenue growth over the medium term, and it will stick with previous plans to invest £18bn between 2024 and 2029.

The company, based in the West Midlands, said it will add the ability to make hybrid electric versions of its smaller SUVs at its factory at Halewood, Merseyside, as well as a hybrid version of its bestselling Defender.

The shared manufacturing blueprint for those vehicles will be modified to allow the production of more polluting hybrids. Hybrids rely on their petrol engines while also using a small battery to make limited carbon savings.

The decision to make more hybrids, which can typically travel only negligible distances using their batteries, further rolls back a decision in 2023 to make Halewood an electric-only factory.

Exports to the US from the UK attract tariffs of 10%, although senior executives at JLR are also considering producing cars in the US. JLR is also working with Stellantis, the owner of brands including Fiat, Chrysler and Jeep, on a plan that could involve manufacturing.

JLR has already delayed the first sales of its electric version of its flagship Range Rover by a year, and orders for its first electric Jaguar model under a relaunched brand are not expected to open until 2027.

Its slower shift to more electric sales is also a big factor in the UK government’s decision to water down its EV sales targets.

The rules, known as the zero emission vehicle (ZEV) mandate, now imposes a target of 80% of sales being battery electric by 2030, but government sources have indicated the target could be cut as low as 50% after intensive lobbying from the automotive industry and unions representing factory workers.