Jaguar Land Rover has received a £500 million ($621 million) loan guarantee from the UK government, after Theresa May hosted automotive industry heads at 10 Downing Street in her final days as Prime Minister.
Jaguar Land Rover, the UK’s largest automotive exporter, will receive a £500 million guarantee from UK Export Finance (UKEF) for a planned £625 million ($775 million) loan facility from commercial banks. UKEF is the UK’s export credit agency and will provide the guarantee under a new General Export Facility to support UK exports. It will support Jaguar Land Rover’s continued investment into research and development of the design and manufacture of next-generation electric vehicles and future mobility solutions.
The fund is not a loan but a state-backed guarantee that will allow Jaguar Land Rover to more easily secure credit and direct funding in order to “support the company’s design and manufacture of the next generation of electric vehicles and its export activities”. It effectively means that in the unlikely event that JLR were to default on repaying the loan, the government would step in.
As part of its Destination Zero strategy: zero emissions, zero congestion, zero accidents, Jaguar Land Rover is developing autonomous, connected, electric and shared mobility technology, which will feature in a growing number of Jaguar and Land Rover models exported around the world in the future.
Earlier this month, Jaguar Land Rover unveiled plans to produce a range of new electrified vehicles in the UK as it prepares to offer customers electrified options for all Jaguar and Land Rover models from 2020. The British auto major continues to implement Project Charge, its £2.5 billion ($3.1 billion) programme to improve long-term profitability and cash flow.
The loan is expected to be completed in the coming months and amortise over 5 years.