Jaguar Land Rover faces another financial problemAugust 18, 2020
Over the past year, Jaguar Land Rover has faced a number of serious financial difficulties, which have only been exacerbated by the onset of the coronavirus pandemic. Another problem hit the company’s well-being especially hard.
The good news is the company received $ 705 million in financial support from Chinese lenders in June. The British carmaker, owned by Tata, reported poor financial performance and was forced to cancel some projects, including the over-limited Range Rover SV Coupe. The Chinese loan will not bring this SUV back to life, but it will certainly make the JLR’s life much easier. However, the automaker has just suffered another setback.
According to foreign media reports, negotiations for emergency funding between Jaguar Land Rover, Tata Steel, which is owned by the Tata Group, and the UK government as part of a deal to save British taxpayers have failed. The report states that the British authorities have concluded that the Tata Group has enough money and therefore no financial assistance is required.
Another reason for the failure of the negotiations is the tough conditions that had to be set. For example, Jaguar Land Rover was not particularly interested in decarbonizing energy systems because that would require the company to accelerate its electrification program and move away from diesel models earlier than planned. However, both JLR and Tata Steel are still in talks with the government about potential tax breaks.
The reason this latest round of bailout talks took place in the first place is because none of the companies were eligible for benefits as part of the government’s major rescue plans from the coronavirus. Instead, the government has developed a plan under which companies can receive direct loans, which in some circumstances can be converted into shareholdings.
JLR has over 30,000 employees in the UK alone (Tata Steel has 8,000) and their next method of obtaining local funding is likely to come from private sources. Currently, the only all-electric model the automaker offers is the Jaguar I-Pace, although the next-generation XJ flagship sedan will join it next year.
JLR lost nearly $ 1.3 billion between January and July this year and was already excluded from the Bank of England financial support plan due to its low credit rating. JLR’s next move is clear: additional private funding, and it’s good that China can again be a source of it.
- Bill Gates doesn’t believe in electric cars
- Two Lamborghini Sian hybrid supercars arrive in London
- Peugeot introduced the updated crossovers Peugeot 3008 and 5008
- SSC Tuatara hypercar sets new world speed record
- Diesel cars will disappear before gasoline ones