Payne: BMW-Jaguar want to make EV babies

Posted by Talbot Payne on June 8, 2019

The Jaguar I-Pace charges on a 240-volt charger .

BMW and Jaguar Land Rover have announced they are tying the knot on power-train technology — but their offspring won’t have a growl.

The luxury auto icons will be developing the next generation of drive units for their electric cars, the latest collaboration between rival automakers as they move to Autos 2.0 — or ACES as the joint venture puts it, shorthand for Automated, Connected, Electric and Shared Vehicles.

“The transition to ACES represents the greatest technological shift in the automotive industry in a generation,” said Jaguar Land Rover engineering chief Nick Rogers. “The pace of change and consumer interest in electrified vehicles is gathering real momentum and it’s essential we work across industry to advance the technologies required.”

Automakers have a long history of collaborating on everything from gas engines (Toyota Supra and BMW Z4 share a 6-cylinder) to chassis (Ford and VW share commercial-truck platforms in global markets). On the ACES front, Honda and General Motors have joined forces on autonomous vehicles, and the recent merger talks between Renault SA and Fiat Chrysler Automobiles NV were in part driven by electric vehicle collaboration.

Hook-ups on ACES have become especially important given the uncertain development timeline of autonomous vehicles and the uncertain market for EVs. With hard government mandates looming, EV development is especially pressing.

For the first time governments are forcing automakers to make a particular drive-train — namely,  battery-electric — even though customers have shown little desire for the technology. Automakers have no choice but to follow an expensive path of making vehicles desired by markets — and by governments.

BMW and Jaguar have made their mark as manufacturers of roaring, gas-powered hellions like the M3 sports sedan and F-Type sports car. But both companies have been bullish on EV tech.

Given EVs range and charging issues, luxury buyers have been targeted as early adopters with multiple cars in their garages. BMW has launched a separate, battery-powered, “i-line” of cars led by the i3 hatchback and i8 sports car. Jaguar, too, has been a pioneer with its i-Pace SUV.

But sales of these products have been tepid in a U.S. market where EV owners have been reluctant to buy anything not named Tesla. The Silicon Valley-based electric car-maker has dominated EV sales — for example, its $40,000 Model 3’s unit sales dwarfed the $45,000 i3 in May, 13,950 to 439. And Tesla’s $75,000 Model X SUV outsold the $70,000 Jaguar i-Pace SUV by 1,375 to 228.

Worse for the European duo, Tesla sales have dropped this year as the company has maxed out on selling cars with a $7,500 tax credit. Buyers of BMW and Jaguar EVs still get the full $7,500 credit — the eventual loss of which could be even more devastating as the automakers struggle to meet U.S. regulations. In Europe, a key market for BMW and Jaguar, demand is weak while government mandates are even more onerous.

Faced with these realities, BMW and Jaguar are pooling resources on a new electric-drive unit.

“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 Jaguar’s Rogers. “It was clear from discussions with BMW Group that both companies’ requirements for next-generation EDUs to support this transition have significant overlap making for a mutually beneficial collaboration.”

The agreement allows for efficiencies created from shared R&D — as well as from joint procurement across the industry supply chain.

BMW and Jaguar Land Rover engineers will then jointly develop the EDUs — then manufacture them in separate facilities to meet the needs of their product lines. The British brand says production will take place at two facilities in England: Wolverhampton and Birmingham.

Comments are closed.