Jaguar Land Rover Needs Help From A Staunch Rival Just To Survive

Electric Vehicles / Comments

There's no other choice.

Jaguar Land Rover currently only has one all-electric vehicle on sale, the Jaguar I-Pace. By 2025, it intends to be EV-only. A purely battery-powered version of the just-revealed new Range Rover will arrive for 2024, but until then, the automaker simply does not have enough fuel-efficient vehicles to meet new European Union CO2 emissions standards. What to do? Call Tesla for help.

According to Schmidt Automotive Research and European Commission data, "British-based Tata-owned Jaguar Land Rover intend(s) to form a CO2 pool with the Elon Musk-run company for 2021, alongside Honda that [was] part of Tesla's pool last year."

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The report didn't make clear exactly how much JLR will contribute to be included in the pool this year. Last year, it had to fork over about $50 million. So far this year, Tesla has a little more than $1 billion in regulatory credit revenue globally. The newly Texas-based EV automaker has been selling emissions credits to rival automakers for years. It's actually been a win-win situation.

Tesla earns a lot of money simply because it's an EV automaker only while competitors purchase credits for a lot less money than regulatory fines. Another example of this successful arrangement involves FCA, which struck a $2 billion deal with Tesla in 2019 to pool its European sales.

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9 Crazy And Counterintuitively Cool Stretch Limousines

In 2020, Honda did the same. JLR's decision to pool CO2 shares with Tesla is in contrast with an earlier announcement that it expected to meet emissions targets this year. Aside from the I-Pace, the carmaker does sell plug-in hybrid versions for several of its vehicles. What's changed since? If we had to guess, it has something to do with the ongoing semiconductor chip shortage crisis, which has significantly hurt Jaguar's vehicle production.

Tesla isn't the only automaker that's striking pooling deals with rivals. Ford and Volvo came to an agreement last year to start their own pool to avoid heavy EU fines.

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Source Credits: Schmidt Automotive Research

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