Jaguar Land Rover and BMW will work together on new electric drive units to share costs and accelerate development of future models.
In an announcement this month, the two companies said a team of JLR and BMW experts will engineer the electric-drive units, but each partner will be able to customise them for their respective range of vehicles.
Each company will manufacture its own units.
Both companies will benefit from shared research, engineering and production costs, as well as economies of scale in their purchases from suppliers.
BMW is aiming to make all of its vehicles electric within the next decade. The German automaker’s decision is based primarily on increasing restrictions by the EU on carbon emissions, and partly on the success hybrid and electric cars have had in the market.
This is the latest in a series of industry tie-ups to consolidate work on electric vehicles.
Fiat Chrysler Automobiles proposed merger with Renault, which the French automaker is considering, was driven largely by FCA’s desire to share costs of electrified power trains and ride-hailing projects.
Ford and Volkswagen have talks about a broad alliance to share the costs of electric and self-driving vehicles. General Motors and Honda have been jointly developing battery cells.
Despite the Trump Administration’s move to ease fuel economy and emission standards in the US, European regulators are setting more stringent targets for reducing greenhouse gas emissions from vehicles and other sources.
The UK and France plan to ban sales of new internal combustion vehicles by 2040. Scotland is requiring gasoline and diesel vehicles be phased out by 2032.
‘Greatest technological shift in the automotive industry in a generation’
Jaguar Land Rover, which has said it will only produce new models that are battery-only or hybrids from 2020 and thereafter, is already selling the I-PACE, an electric crossover utility model. The automaker has agreed to sell 20,000 units of the I-PACE to Waymo, which will use them in its commercial ride-hailing service beginning in 2020.
BMW has developed several generations of its own electric drive systems since launching the i3 in 2013. The Munich-based automaker also makes an electric motor, transmission and power electronics in the fifth generation of its e-Drive technology.
“The transition to automated, connected, electric and shared transportation represents the greatest technological shift in the automotive industry in a generation,” said Nick Rogers, JLR engineering director, in a statement. “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 to deliver this exciting future.”
BMW board member Klaus Froehlich said: "We have the opportunity to cater more effectively for customer needs by shortening development time and bringing vehicles and state-of-the-art technologies more rapidly to market."
BMW bought Rover Group, which then included Jaguar and Land Rover brands for $902 million in 1994. It then sold Jaguar Land Rover to Ford in 2000 for $2.7 billion.
In 2008, India’s Tata Group bought Jaguar and Land Rover from Ford for $2.3 billion