Key facts
- Jaguar Land Rover (JLR) faces potential delays in receiving electric vehicle batteries from the Agratas gigafactory in Somerset.
- Agratas has terminated its primary construction contractor, Sir Robert McAlpine (SRM), and appointed Tonroe Group Ltd (TSL) as the new contractor.
- The project's construction budget of approximately £800m is expected to be exceeded by at least £500m.
- The factory's operational start date, initially targeted for 2026 and later pushed to 2027, is now expected to miss the January 2028 internal target.
- JLR relies on the Agratas factory, owned by Tata, for batteries for its new electric Jaguar and Land Rover models.
Jaguar Land Rover (JLR) is at risk of delays in receiving electric vehicle batteries due to significant construction issues at the Agratas gigafactory in Somerset, UK. The factory, intended to be a crucial component of the UK's automotive industry transition, has seen its primary contractor, Sir Robert McAlpine (SRM), terminated with only three weeks' notice. A new contractor, Tonroe Group Ltd (TSL), has been appointed.
The project is facing substantial cost overruns, with the construction budget of approximately £800m expected to be exceeded by at least £500m. This financial pressure has reportedly created tensions with contractors, including SRM, which worked under a temporary arrangement for over two years without a formal contract.
Furthermore, the factory's operational start date has been repeatedly pushed back. Initially targeted for 2026 and later revised to 2027, the current internal start date of January 2028 is also likely to be missed. Several critical project milestones are behind schedule, including the procurement of essential substation equipment, which can take up to two years to arrive, and work on an important ring road. There has also been a high turnover of senior staff within Agratas's UK operations.
These delays pose a significant challenge for JLR, which plans to use the Somerset facility's batteries for its new electric Jaguar and Land Rover models. The company's ability to meet the UK's electric car sales targets (ZEV mandate) could be jeopardized, potentially exposing JLR to fines. JLR executives have expressed doubts about meeting future targets, which is believed to have contributed to the UK government's decision to water down the mandate. Additionally, JLR's strategy to sell more hybrid models may also impact future demand for batteries from the Somerset plant.
Agratas stated that a different construction delivery model was needed and thanked the outgoing partner for their support. SRM indicated they had mutually agreed to part ways after completing the first phase and are supporting the transition. JLR declined to comment.