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Jaguar Land Rover owner to split off its cars division in EV shift

Tata JLR
Tata's demerger will see its existing auto business effectively divided between passenger cars and commercial vehicles - Chris Ratcliffe/Bloomberg

The Indian owner of Jaguar Land Rover (JLR) is to spin off its car division as it prepares for a future built around electric vehicles (EVs).

Tata Motors on Monday said the demerger will see its existing auto business effectively divided between passenger cars and commercial vehicles.

The former will focus on EVs while the latter will produce larger vehicles such as trucks and buses.

Each business will retain the same list of shareholders, the biggest by far being the Tata & Sons family conglomerate.

Mumbai-based Tata said the move would allow each of the demerged businesses to pursue their own strategies, noting there were “considerable synergies” to be had in the passenger car business, “particularly in the areas of EVs, autonomous vehicles, and vehicle software”.

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The separation of the EV-led business will allow that part of the company to raise money from investors who want to bet on the shift away from petrol and diesel.

It comes as JLR is investing £15bn over five years to convert its UK factory lines to produce battery-powered versions of its Jaguar sports cars and Range Rover SUVs.

Later this year, the first fully-electric Range Rover is due to be released, with more than 16,000 customers reportedly on the waiting list.

N Chandrasekaran, chairman of Tata Motors, said: “Tata Motors has scripted a strong turnaround in the last few years.

“The three automotive business units are now operating independently and delivering consistent performance.

“This demerger will help them better capitalise on the opportunities provided by the market by enhancing their focus and agility.

“This will lead to a superior experience for our customers, better growth prospects for our employees and enhanced value for our shareholders.”

The proposal will now be considered by the board of Tata Motors. It will also be subject to approval by shareholders and regulators, with Tata saying it could take as long as 15 months.

Tata was India’s most valuable carmaker last month, thanks to the company’s strong position in the SUV and EV markets.

The car maker’s shares have surged more than 124pc higher in the past year.

Tata & Sons is also reportedly considering a spinoff and listing of Agratas, the battery business that is building a £4bn “gigafactory” in Somerset.

That plant is due to begin operating in 2026 and will eventually be one of Europe’s largest.