Jaguar Land Rover faces production issues that have hit the bottom line as the automaker seeks a jerky transition to electric vehicles.
Part of the problem is that JLR’s Parent company Tata Motors (NYSE:TTM) lacks the clout that luxury rivals Bentley (owned by Volkswagen) and Rolls-Royce (owned by BMW) say they have in their favor The times. While Bentley and Rolls-Royce reported strong sales in 2022, JLR fell short in part due to semiconductor shortages, although there was some improvement in the fourth quarter.
“They’re a middle-class player and have found it harder to deal with the chip shortage,” noted Zeus Capital’s Mike Allen.
Looking ahead, Jaguar Land Rover’s transition to electric vehicles is said to be urgent, as by 2024 22% of manufacturers’ car sales in the UK will need to be electric before the rate increases to an ever-higher rate by the end of the decade. Analysts have warned there is no communication from JLR on what kind of volume is forecast, and plans to electrify Range Rovers also remain under wraps. That leaves a large potential financial backlog for JLR and Tata Motors in the form of a hefty fine in the UK.
JLR parent company Tata Motors’ Seeking Alpha Quant Rating has moved Holding from selling at the end of 2022.