JAGUAR LAND ROVER (JLR) has put on hold plans to manufacture electric vehicles at Tata Motors’ upcoming £775 million factory in southern India, according to a news report.
The decision was influenced by challenges in balancing price and quality for locally sourced EV components, three of the sources said. They added that slowing demand for electric vehicles was also a factor.
“All the work (on JLR electric vehicles) in India has stopped. Everything has been suspended since about two months ago,” a supplier source told Reuters.
Automakers worldwide are adjusting their electrification strategies due to increasing competition from Chinese manufacturers, rising demand for hybrid vehicles, and changing government policies on emissions and EV sales targets.
JLR’s move is expected to delay Tata Passenger Electric Mobility’s plan to launch its premium Avinya models, sources told Reuters.
The Avinya models were to be built on the same platform as JLR’s electric vehicles, with some components jointly sourced.
Tata started construction of the new factory in September. The plant, which will manufacture both electric and non-electric vehicles, is expected to reach full capacity in 5-7 years, producing over 250,000 cars annually.
JLR had initially planned to manufacture more than 70,000 electric vehicles at the facility, while Tata’s EV unit was set to produce 25,000, according to sources.
Tata, in a statement to Reuters, said that production timelines and model selection for the new Tamil Nadu plant will align with the company’s broader market strategy.
Tata is the leading EV manufacturer in India but faces increased competition from JSW MG Motor and Mahindra and Mahindra, which have introduced new models with extended driving ranges.
Tesla is also preparing to launch EVs in India, where annual car sales total 4 million, with electric vehicles making up about 2 per cent of the market.
Economic challenges
JLR had held discussions with local suppliers in Mumbai last November, sharing plans and exploring options for sourcing components locally.
Some suppliers were asked to provide preliminary pricing information, but these discussions have now been halted, sources said.
JLR primarily manufactures its vehicles in Britain, Europe, and China but assembles some models, such as Range Rover SUVs, at Tata’s Pune plant in Maharashtra.
Tata’s EV division had planned to finalise supplier contracts by January but is now making design changes as the financial viability of the plan has been affected by JLR’s decision, two sources said.
In January, Tata pushed back the launch of the Avinya EV to 2026-2027 from an earlier target of this year. It remains unclear if the latest developments will cause further delays.
“As part of our rigorous product development process, we continuously evaluate key factors such as design, supply chain readiness, and unit economics to ensure a competitive and high-quality offering,” Tata said in its statement.
(With inputs from Reuters)
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