LONDON -- Chinese EV and battery specialist BYD is in talks with Jaguar Land Rover to supply automotive batteries from a UK plant, a source with knowledge of the situation said.
JLR CEO Ralf Speth has previously said the UK needs its own battery cell production, but operated independently of JLR.
The UK would be BYD’s first European battery cell factory but the company is also looking at other European locations, the source said.
The UK urgently needs to secure battery cell plant investment while global battery players are still deciding where to put capacity, the Faraday Institute wrote in a report published last year. The institute is the research arm of the UK government-funded Faraday Battery Challenge, which was set up to attract battery cell production.
"Within a year, most car producers and battery manufacturers will make their decisions about where in Europe the next generation of gigafactories will be built. Without urgent action, the UK is in danger of losing out in the race," the institute said.
The UK's undefined future trading relationship with the EU after Britain formally left the trading bloc on Jan. 31 is delaying BYD's decision, the source said. The UK and EU are in talks to secure a deal before the end of the year when the current transition trade arrangement ends.
JLR and BYD are also investigating whether to collaborate on electric propulsion development as part of the supply deal, the source added.
A more structured agreement to work together rather a straight supplier relationship is BYD’s preferred option, the source said.
BYD was an early mover in the electric vehicle and battery market in China, and is part-owned by Warren Buffett’s Berkshire Hathaway company, which has an 8.25 percent share.
BYD has said it will start selling its Tang electric SUV in Norway later this year. The company is better known in Europe for selling electric buses, which it builds in factories in Komarom, Hungary, and Beauvais, France.
JLR currently sells the Jaguar I-Pace electric crossover, which is built by Magna Steyr in Austria. It plans to produce a full-electric version of the Jaguar XJ sedan at its Castle Bromwich factory in England.
The electric XJ will be the first in a series of EVs built on the company’s new flexible MLA platform that can be used for pure electric, plug-in hybrid, and mild-hybrid drivetrains.
The automaker is also expanding its range of plug-in hybrids to include the Range Rover Evoque and the new Land Rover Defender.