Jaguar Land Rover unveils its new electric Range Rover sport model

Yahoo Finance's Pras Subramanian breaks down the latest EV SUV showcased by Jaguar Land Rover, in addition to the vehicle shortage the manufacturer has predicted.

Video transcript

RACHELLE AKUFFO: Range Rover unveiled a new electric model. What can you tell us about that?

PRAS SUBRAMANIAN: That's right, Rachelle. JLR, Jaguar Land Rover, unveiled the new Range Rover Sport. This is a very popular mid-size SUV that Range Rover has on offer. A lot of their customers love this car. So there's going to be a number of drive-trains, like a [? mild ?] hybrid, a hybrid, a regular gas V8, and then the EV model coming out in a couple years. That's what everyone's expecting to see an excited about.

This as the brand sort of slowly transitions from gas to EV power. I spoke to one of the product planners at the event in New York City and he told me that they built this platform with both gas powered and EV power in mind. Their customers are kind of both evenly split, telling them, hey, we love those big V8s, but we also want to see electric power too. So they're trying to meet both of those demands there from the customers.

But you've got to ask yourself, because this brand has taken a long time to transition, they're going to have about six EVs by 2026, and they want to target like over half their sales by 2030 to be EVs, which is well short of a lot of their competitors. But hey, you know, the products that Land Rover makes are very popular. It's niche, off road people, people that like that overlanding community, people like that really high end offering kind of fuel. So they're going to take the time with it, because they do, they can actually afford to do so.

DAVE BRIGGS: And Pras, one of the many challenges, of course, the chip shortage. And they warned on that. How long might they impact them? And is the entire industry feeling the same pressure?

PRAS SUBRAMANIAN: Yeah, well as Jaguar Land Rover tries to transition, their parent is Tata Motors. And they actually reported a surprise loss this past fiscal quarter. They're saying that the chip and component shortages were behind that. And even JLR says that they think that the chip shortages will last through 2023, not just 2022. So that's a problem.

But also, they've reported some good news here. They reported that their order book has grown by 8% in the last quarter, on the order of 160,000 vehicles on order, which is really good for them. And you know, I spoke to one of their board members at the LA Auto Show this year and talked about how they want to go from a push to a pull type of demand system, where they actually don't push a lot of inventory to dealers.

They want to actually have their customers order them, send them out there in a timely manner, and not have these big capital expenditures and financial costs having a lot of units at dealer lots. So I think they're trying to change the business model. And maybe that will help them when they try to alleviate these chip shortages that are happening. They'll make fewer models, but also make them just specifically for their customers.