Jaguar Land Rover Shelves EV Production in India
Jaguar Land Rover (JLR) has scrapped its plans to manufacture electric vehicles (EVs) at a new $1 billion factory in southern India owned by its parent company, Tata Motors, according to four sources familiar with the matter. The decision, stemming from an inability to achieve the right balance between price and quality for locally sourced EV parts, has also prompted delays in Tata Passenger Electric Mobility’s (TPEM) launch of its premium Avinya models, three of the sources revealed. The suspension of the project has been in effect for approximately two months.
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The move reflects a broader trend of global car brands reassessing their electrification strategies amidst growing competition, the rising popularity of hybrid vehicles, and evolving government timelines for emission regulations and EV sales targets. The new factory in Tamil Nadu, which began construction in September, was designed to produce over 250,000 cars annually at full capacity, expected in 5-7 years. JLR had initially planned to manufacture over 70,000 electric cars at the facility, with TPEM slated to build an additional 25,000.
“For India, all the work (on JLR electric vehicles) has stopped. Everything has been suspended since about two months,” a supplier source said. The sources requested anonymity because they were not authorized to speak to the media.
Tata Motors responded in a statement, indicating that the production timelines and model choices for the Tamil Nadu plant would be aligned with the broader strategy of the two companies and market demands.
The sources were not authorised to speak to media and declined to be identified.
Tata, the current market leader in India’s nascent EV market, faces increasing competition from rivals such as JSW MG Motor and Mahindra & Mahindra, who are rolling out new models with enhanced features and longer driving ranges. Tesla is also finalizing plans to introduce EVs in India, a significant market with 4 million vehicles sold annually. Currently, EVs represent about 2% of the total car sales in India.
Shifting Economics
In November, JLR hosted a meeting with local suppliers in Mumbai to discuss its plans and requirements for locally-sourced components. Some suppliers were asked to provide initial pricing details. However, these discussions have since been put on hold, according to the sources. JLR primarily produces its vehicles in Britain, Europe, and China but assembles some of its cars, such as the Range Rover SUVs, at Tata’s plant in Pune, Maharashtra.
TPEM had planned to finalize orders with suppliers by the end of January but has since revised its designs because the economics of its plan were not favorable without JLR’s participation, according to two of the sources. Tata had already moved the launch of its Avinya EV to 2026-2027, which was previously scheduled for this year. Whether the current situation will cause further delays is currently uncertain.
Tata’s statement added, “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.”
