UK Export Finance (UKEF), the export credit agency of the British government, has issued a £500 million loan guarantee to carmaker Jaguar Land Rover.
The guarantee, announced yesterday, will support the research and development into and the export of battery electric vehicles (BEVs) at Jaguar Land Rover.
Under the deal, UKEF will guarantee 80% of a new £625 million loan from 12 commercial banks to Jaguar Land Rover.
The tie-up is part of UKEF’s Export Development Guarantee (EDG) programme, which is aimed at driving major investments into UK exporters.
The loan will support Jaguar Land Rover’s plans to invest about £2.5 billion a year, expected to reach £3 billion by March 2026, to increase the number of BEVs in its model lineup under its Reimagine Strategy.
Adrian Mardell, chief financial officer at Jaguar Land Rover, said: “This facility will help support the significant investment in our transition to offer a fully electrified product portfolio, and to achieve our target of net zero carbon emissions by 2039.”
Green on wheels
Jaguar Land Rover was previously the first UK company to participate in UKEF’s EDG programme in 2019, and has now received over £1 billion of loans under this programme.
Since the last loan was issued, Jaguar Land Rover has significantly accelerated its plans for expanding its lineup of fully electric vehicles under its new Reimagine Strategy.
It now has plans to offer new all-electric Jaguar models from 2025, and six pure electric Land Rover variants over the next five years.
At present, Jaguar Land Rover is one of the UK’s largest manufacturers, with a total revenue of nearly £20 billion in the last financial year.
It also one of the UK’s major employers, with over 28,000 staff based in the UK, and is one of the country’s largest exporters.
Over 80% of vehicles built by Jaguar Land Rover in the UK are sold to the world, and three of its seven global technology hubs are based in Manchester, Warwick, and London.
In 2020-21, Jaguar Land Rover sold 439,588 vehicles in 127 countries.
Further UK government support
Supporting EV production is also a key part of the UK’s Ten Point Plan for a Green Industrial Revolution, which was first announced in November 2020.
In an effort to ensure that the British auto industry remains competitive, the government is directly investing more than £850 million to develop the supply chain for cleaner vehicles.
The British government has also supported over £2 billion of commercial investment into the industry’s export capacity through UKEF.