Jaguar Land Rover will slash its manufacturing capacity by 25% over five years and write off investment in products it’s decided to scrap under new Chief Executive Officer Thierry Bollore.
The British carmaker will take a non-cash charge of about 1 billion pounds ($1.4 billion) in the quarter ending in March related to higher previous spending and projects it won’t complete, according to an investor presentation.
The company said last week it was calling off plans to build a battery-powered replacement of the Jaguar XJ sedan.
The Tata Motors Ltd.-owned manufacturer’s new business plan under Bollore, 57, includes making the Jaguar marque all-electric within four years while giving the Land Rover sport utility vehicle brand more time to make the jump.
On Friday, the carmaker said it has lowered its breakeven point to about 400,000 vehicles a year, from 600,000.
JLR’s pivot away from the internal combustion engine is the latest seismic shift in the auto industry driven by stricter emissions rules.
It’s poised to be a challenging one for the company, which has struggled to comply with pollution standards and was seeing a dip in demand from China even before the pandemic hit.
The carmaker will introduce six fully electric Land Rover variants in the next five years.
By 2030, it expects all of its Jaguar models and 60% of Land Rovers sold to be zero-emissions vehicles.