Acouple of years ago, Jaguar Land Rover famously announced it was completely shutting down production on all of its current vehicles in the Jaguar lineup and switching over to electric models going forward. The process was to take a few years and would cost the company tens of billions in retooling, research and development, and lost revenue.
Most anyone with any business sense thought this was the dumbest idea they’d ever heard. Well, recently heard anyway. Some of us still remember Blockbuster rejecting a chance to buy Netflix. (Sigh.. Some of us still remember Blockbuster.. Yes, I’m that old.)
At any rate, Jaguar’s announcement didn’t hurt Jaguar Land Rover’s bottom line too much since Jaguar was generally not a money maker anyway. Most of JLR’s income has always been from the second half of the company’s name.
Production of Jag’s cars ended in mid-2024 while the (somewhat profitable) Pace sport utilities took another year or so to stop sales. Plans were to refit production facilities to go all-EV and introduce the first Jaguar EV as a four-door grand touring car with a six figure price tag. Probably in 2027, but most expect this will be delayed.
Now Jaguar has announced that the company is going to make hybrid gasoline-electric (sorry, they’re British.. petrol-electric) cars as well. JLR is also delaying launch of its all-electric Range Rover by another year.
Blame for why the sudden switch is going to vary by politics. An objective view will see three major factors, though:
- Consumer expectations and demand (the market)
- Political wind change
- Jaguar’s primary sales market
The Consumer Market
Globally, but especially in the U.S., consumers are not as keen on electric vehicles as once thought. The realities of cost and convenience have set in. Although global EV sales are still rising, their growth in market share is being tempered by the satiation of early adopters.
Those who were willing to jump on the “new, shiny!” bandwagon—and who could afford to do it—have done so.
In short, the bullish EV market is getting a life lesson: cars are a way bigger investment than cell phones are. Most people don’t buy new and shiny on the whole, they buy based on price and convenience. Which EVs can’t usually offer. Consequently, it takes a lot longer to change the automotive market than many EVangelists have been willing to admit.
Changing Political Trade Winds
In the U.S., especially, the push for electric vehicles has stalled. This is a combination of the politicization of the EV, making it an “us versus them” thing, and who’s in charge of government right now.
Arguments about the EV incentive get political really fast. Because those who don’t like the incentivization are currently in charge, the incentives went away. I personally don’t see this as a big downer for EVs on the whole, since it’s a removal of a market manipulation that allows EVs to correct and begin competing more evenly. But that’s probably over-simplifying it since the incentives weren’t all consumer-side.
Manufacturers also jumped on the EV bandwagon when it was politically popular. And got a lot of incentivization to do so. Especially those brands whose location is commonly associated with Detroit. Now the changing tide has meant they’re pulling back and pretending they weren’t as all-in as they indicated.
Jaguar’s Primary Sales Market
Despite being a British brand, Jaguar vehicles have long sold the best in the U.S. Jaguar’s primary buyer is someone with a very high net worth. The U.S. has the world’s largest concentration of multi-millionaires (by total) who also drive their own cars.
And since the U.S. market is no longer pro-EV and has clearly been embracing hybrids instead, Jaguar has had to rethink some things.
But it’s not just because of U.S. er.. us. Similar trends are happening in the UK. The government there has also had to revise its EV sales targets as well as some fuel economy regulation.
All of which means that Jaguar’s original plan to just sell electric cars meant that Jaguar wasn’t going to sell very many of its electric cars. Because its largest audience is not greatly interested in them. They buy Toyota Camrys.
No, really. Look it up.
Granted, theoretically, an electric car would have far fewer problems and maintenance requirements versus a gasoline version. But British engineering would have something to say about that. They’ll find a way to make it leak oil somehow.
Jokes aside, though, the decision by Jaguar to jump off the “EV or Bust” bandwagon, though late, is probably a wise one. Longer-term, it’s going to be a while before EV is in the majority in the U.S.
This article originally published on the AaronOnAutos Substack.
