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You'll Never Guess This New Automaker Partnership

Industry News / 15 Comments

Here's a hint: both are from Europe.

If there's one thing we've learned regarding the automotive industry lately, it's this: partnerships are the new thing. Whether it'd be an alliance or an all-out merger, the ultimate goal is to save time and money due to common interests. Today, there's yet another announcement to make regarding this subject.

BMW and Jaguar Land Rover have just announced they formed a new alliance that will see them jointly develop electric motors, transmissions, and power electronics as part of an effort to reduce electric vehicle costs. Both automakers have big plans regarding EVs that will help them meet strict emissions laws, but each was concerned about low profit margins due to the rising costs of building electric, connected, and autonomous cars.

"Together, we have the opportunity to cater more effectively for customer needs by shortening development time and bringing vehicles and state-of-the-art technologies more rapidly to market," said BMW board member Klaus Froehlich. BMW and Jaguar plan to save costs via shared development, production planning, and joint purchasing of EV components, but the vehicles' drivetrains will not be built alongside each other.

"We've proven we can build world-beating electric cars but now we need to scale the technology to support the next generation of Jaguar and Land Rover products," said Nick Rogers, Jaguar Land Rover's engineering director. Interestingly, BMW was previously talking with its domestic rival Daimler about potentially co-developing EV components. It was also apparently holding talks with JLR as well.

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This isn't the only deal happening now between BMW and JLR. The former provides an 8 cylinder engine to the UK automaker. More than likely there will be additional alliances to come, perhaps more mergers. Late last month, FCA announced a proposed $35 billion merger with Renault as part of an effort to not only reduce development costs for EVs and autonomous cars but also to gain a presence in various markets where each is currently lacking.

It's important to point out that this BMW-JLR deal is not a merger but rather a financial and production deal involving common interests. Interestingly, JLR is currently run by a host of BMW veterans, including CEO Ralph Speth who spent 20 years at BMW. JLR also announced a $4 billion loss earlier this year, so this BMW deal is finally some good news.

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