Taxpayers will underwrite £500 million of a £625 million Jaguar Land Rover (JLR) loan facility as part of Government efforts back its development of electric vehicles (EVs) in the UK.
Prime Minister Theresa May gave the green light to the financial backing just a fortnight after the brand said that it would be developing and manufacturing its next-generation of EVs at its Castle Bromwich plant.
Details of the deal, which followed a meeting between May and automotive industry heads at 10 Downing Street, emerged two months after JLR posted a £3.6bn annual loss and amid sweeping job losses and a drive for efficiencies aiming to save £2.5 billion in costs at Tata-owned JLR.
However, news of the new EV projects at Castle Bromwich is said to have secured 2,000 jobs at the OEM.
Speaking to The Times newspaper, Professor David Bailey, David Bailey, Professor of Business Economics at the Birmingham Business School, said: “This is an example of a much more proactive industrial policy from government than seen hitherto but it does come very soon after JLR’s announcement that it would invest heavily in the Castle Bromwich plant.”
The Government had previously handed Nissan a £60m funding package designed to secure production of the new Nissan X-Trail at the manufacturer’s Sunderland.
This followed a meeting of May and former Nissan chairman Carlos Ghosn at Downing Street.
In a statement issued following news of its £500m package a JLR spokesman told The Times that there was no link between the plans for Castle Bromich and the funding granted by Government.
He said that making decision based on Government funding was “impossible”.
Its chief executive, Ralph Speth, said the future of mobility is electric and JLR is a visionary British company, adding: “We are co-locating our electric vehicle manufacture, electronic drive units and battery assembly to create a powerhouse of electrification in the Midlands.”