Jaguar Land Rover drives Halewood EV future with £500m investment
Jaguar Land Rover (JLR) has revealed a further £500m investment in its Halewood plant on Merseyside to bolster future production of all-electric cars at the site.
The country’s largest automotive manufacturer, which revealed plans in 2023 to produce the first emission-free model at Halewood in early 2025, is now targeting a timeframe later that year.
It signalled a greater ambition for Halewood at a time when global demand for new cars remains constrained.
The plant, which currently makes hybrid, diesel and petrol-powered Range Rover Evoque and Discovery Sport models, has already been expanded to allow for electric vehicle (EV) production to run alongside.
A decision is yet to be taken on what electric model will be manufactured at Halewood first.
It is, however, expected to be a mid-sized vehicle under the Range Rover brand.
JLR said it was creating the “factory of the future” at the site, which has been in use for car production since the 1960s.
The transformation at Halewood, which has involved a £250m investment to date, includes new production floor space for the electric model and a retraining programme for all staff.
The production lines will also utilise 750 autonomous robots and laser alignment technology, JLR said, overseen by cloud-based digital plant management systems.
The company plans to use robot and cloud-based technology to run its electric manufacturing processes. Pic: JLR
The company is behind the Jaguar, Land Rover and Range Rover brands. Pic: JLR
The additional cash will include the creation of a new body shop, capable of producing 500 vehicle bodies per day, and an extended paint line to handle different body shapes.
The company, owned by India’s Tata Motors, is investing a total of £18bn in its ReImagine programme that aims to have all its vehicles electric-only by 2030.
Barbara Bergmeier, executive director of JLR’s industrial operations, said: ”Halewood has been the heart and soul of JLR in the northwest of England for well over two decades, producing vehicles such as the Range Rover Evoque and Discovery Sport.
“Halewood will be our first all-electric production facility, and it is a testament to the brilliant efforts by our teams and suppliers who have worked together to equip the plant with the technology needed to deliver our world class luxury electric vehicles.”
The industry’s transition – demanded by global climate targets – has not been a smooth one.
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Consumer concerns over cost, ranges and availability of public charging points have combined to leave sales of new electric cars at levels that have disappointed the industry.
That’s despite stronger competition as new models and technological improvements continue to come on stream.
Major headaches for producers have been the continued squeeze on household budgets globally and the economic slowdown in China, the industry’s biggest growth market.
At the same time, the US and European Union have moved to slap additional tariffs on Chinese-made EVs on the grounds the models are too competitively priced due to state subsidies.
Data revealed by the UK’s Society of Motor Manufacturers and Traders (SMMT) on Thursday showed a continued fall in production last month as factories grapple the uncertain demand and switch to new models.
Just 41,271 new cars left production lines, 3,781 fewer than last August.
The SMMT said that battery electric, plug-in hybrid and hybrid production for the month fell by 25% but that the trend was expected to be reversed as new models come onstream.
The SMMT has consistently appealed for incentives from government to help bolster the EV market.
The business secretary will next week hold talks with dozens of private sector bosses as the government contends with a significant corporate backlash to Labour’s first fiscal event in nearly 15 years.
Sky News has learnt that executives have been invited to join a conference call on Monday with Jonathan Reynolds, in what will represent his first meaningful engagement with employers since Wednesday’s budget statement.
Rachel Reeves, the chancellor, unsettled financial markets with plans for billions of pounds in extra borrowing, and unnerved business leaders by saying she would raise an additional £25bn annually by hiking their national insurance contributions.
An increase in employer NICs had been trailed by officials in advance of the budget, but the lowering of the threshold to just £5,000 has triggered forecasts of a wave of redundancies and even insolvencies across labour-intensive industries.
Sectors such as retail and hospitality, which employ substantial numbers of part-time workers, have been particularly vocal in their condemnation of the move.
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On Friday, the Financial Times published comments made by the chief executive of Barclays in which he defended Ms Reeves.
“I think they’ve done an admirable job of balancing spending, borrowing and taxation in order to drive the fundamental objective of growth,” CS Venkatakrishnan said.
His was a rare voice among prominent business figures in backing the chancellor, however, with many questioning whether the government had a meaningful plan to grow the economy.
Mr Reynolds held a similar call with business leaders within days of general election victory, and over 100 bosses are understood to have been invited to Monday’s discussion.
A spokesman for the Department for Business and Trade declined to comment ahead of Monday’s call.
First things first: don’t panic.
What you need to know is this. The budget has not gone down well in financial markets. Indeed, it’s gone down about as badly as any budget in recent years, save for Liz Truss’s mini-budget.
The pound is weaker. Government bond yields (essentially, the interest rate the exchequer pays on its debt) have gone up.
That’s precisely the opposite market reaction to the one chancellors like to see after they commend their fiscal statements to the house.
In hindsight, perhaps we shouldn’t be surprised.
After all, the new government just committed itself to considerably more borrowing than its predecessors – about £140bn more borrowing in the coming years. And that money has to be borrowed from someone – namely, financial markets.
But those financial markets are now reassessing how keen they are to lend to the UK.
The upshot is that the pound has fallen quite sharply (the biggest two-day fall in trade-weighted sterling in 18 months) and gilt yields – the interest rate paid by the government – have risen quite sharply.
This was all beginning to crystallise shortly after the budget speech, with yields beginning to rise and the pound beginning to weaken, the moment investors and economists got their hands on the budget documentation.
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Chancellor challenged over gilt yield spike
But the falls in the pound and the rises in the bond yields accelerated today.
This is not, to be absolutely clear, the kind of response any chancellor wants to see after a budget – let alone their first budget in office.
Indeed, I can’t remember another budget which saw as hostile a market response as this one in many years – save for one.
That exception is, of course, the Liz Truss/Kwasi Kwarteng mini-budget of 2022. And here is where you’ll find the silver lining for Keir Starmer and Rachel Reeves.
The rises in gilt yields and falls in sterling in recent hours and days are still far shy of what took place in the run up and aftermath of the mini-budget. This does not yet feel like a crisis moment for UK markets.
But nor is it anything like good news for the government. In fact, it’s pretty awful. Because higher borrowing rates for UK debt mean it (well, us) will end up paying considerably more to service our debt in the coming years.
Rachel Reeves leaving 11 Downing Street before the budget. Pic: PA
And that debt is about to balloon dramatically because of the plans laid down by the chancellor this week.
And this is where things get particularly sticky for Ms Reeves.
In that budget documentation, the Office for Budget Responsibility said the chancellor could afford to see those gilt yields rise by about 1.3 percentage points, but then when they exceeded this level, the so-called “headroom” she had against her fiscal rules would evaporate.
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In other words, she’d break those rules – which, recall, are considerably less strict than the ones she inherited from Jeremy Hunt.
Which raises the question: where are those gilt yields right now? How close are they to the danger zone where the chancellor ends up breaking her rules?
Short answer: worryingly close. Because, right now, the yield on five-year government debt (which is the maturity the OBR focuses on most) is more than halfway towards that danger zone – only 56 basis points away from hitting the point where debt interest costs eat up any leeway the chancellor has to avoid breaking her rules.
Now, we are not in crisis territory yet. Nor can every move in currencies and bonds be attributed to this budget.
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Markets are volatile right now. There’s lots going on: a US election next week and a Bank of England decision on interest rates next week.
The chancellor could get lucky. Gilt yields could settle in the coming days. But, right now, the UK, with its high level of public and private debt, with its new government which has just pledged to borrow many billions more in the coming years, is being closely scrutinised by the “bond vigilantes”.
A Halloween nightmare for any chancellor.
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