BMW and Jaguar Land Rover to jointly develop electric motors

BMW and Jaguar Land Rover on Wednesday said they would jointly develop electric motors, transmissions and power electronics, unveiling yet another industry alliance designed to lower the cost of developing electric cars.

Both car makers are under pressure to roll out zero-emission vehicles to meet stringent anti-pollution rules but have struggled to maintain profit margins in the face of the rising costs of making electric, connected and autonomous cars.

"Together, 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," said BMW board member Klaus Froehlich.

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BMW and Jaguar Land Rover said they would save costs through shared development, production planning and joint purchasing of electric car components. Both companies will produce electric drivetrains in their own manufacturing facilities, BMW said.

BMW brings long experience of developing and producing several generations of electric drive units in-house since it launched the battery-powered i3 in 2013. Jaguar Land Rover has demonstrated its capability with this technology through its plug-in hybrid models and the award-winning Jaguar I-Pace electric SUV.

The BMW-Jaguar Land Rover pact comes as rivals FiatChrysler and Renault explore a $35bn tie-up of the Italian-American and French car making groups.

Nick Rogers, Jaguar Land Rover's engineering director, said: "We've proven we can build world-beating electric cars but now we need to scale the technology to support the next generation of Jaguar and Land Rover products."

BMW was in talks with rival Daimler about developing electric car components, but was also in discussions with Jaguar Land Rover, a company it once owned, to explore an alliance on engines.

BMW already has a deal to supply an eight-cylinder engine to Jaguar Land Rover.

Car-makers are increasingly open to sharing electric car parts because the technology is expensive and because customers no longer buy a car based on what engine a vehicle has.

"Car-makers are much less precious about sharing electric car technology because it is much harder to create product differentiation with electric car tech. They all accelerate fast, and everybody can do quality and ride and handling," according to Carl-Peter Forster, a former chief executive of Tata Motors and a former BMW executive.

Jaguar Land Rover said it would redouble efforts to cut costs after it posted a $4bn loss earlier this year, hit by a downturn in demand for sports utility vehicles in China and a regulatory clampdown on diesel emissions.

BMW bought Britain's Rover Group, which included the Jaguar and Land Rover brands, for £800m in 1994, only to sell Jaguar Land Rover to Ford in March 2000 for $2.7bn. In 2008 India's Tata Group bought Jaguar and Land Rover from Ford for $2.3bn.