Jaguar will pause I-Pace production because of battery shortage

Jaguar will pause I-Pace production because of battery shortage

Jaguar Land Rover plans to stop making the I-Pace electric SUV for a week because of a battery shortage at supplier LG Chem, The Times reported on Sunday.

The production halt will start Monday, February 17th, in Graz, Austria, where contract manufacturer Magna Steyr makes the I-Pace for Jaguar Land Rover. When the I-Paces stop rolling off the line, it will be at least the third time that a battery shortage at LG Chem has affected the production of an electric vehicle.

Back in 2017, Hyundai fell behind on the production of its Ioniq EV because LG Chem reportedly couldn’t keep up with demand for its batteries. In April 2019, a supply shortage at LG Chem caused Audi to delay the deliveries of its first electric car, the E-Tron. Audi subsequently cut its production targets for the year because of the delay. Mercedes-Benz also reportedly had to lower its goals for sales of the EQC, the company’s first mass-market electric car, last month due to supply shortages at LG Chem, though parent company Daimler has pushed back on this claim.

“Jaguar Land Rover has adjusted production schedules of the Jaguar I-PACE in Graz due to temporary supplier scheduling issues,” the company said. “We are working with the supplier to resolve this and minimise impact on customer orders.”

Jaguar Land Rover said the delay is related to LG Chem’s battery factory in Poland, but it would not offer any more information about the shortage. A representative for LG Chem did not respond to a request for comment.

Shortage-fueled delays like the one Jaguar Land Rover is experiencing with the I-Pace help illustrate an often-overlooked point about the adoption of electric vehicles: the big, multibillion-dollar promises most automakers have made about electric vehicles are only as good as the suppliers they rely on.

A few automakers have gone to great lengths to avoid this problem. Volkswagen has spent some $50 billion locking down its battery supply chain over the next few decades and has inked deals with three different battery suppliers to meet demand, for example. Tesla struck a deal years ago with Panasonic to co-design and manufacture batteries for its electric vehicles at the company’s Gigafactory in Nevada, and it recently signed on LG Chem and Contemporary Amperex Technology, or CATL, to supply batteries for its new factory in China.

Still, it’s curious that Jaguar Land Rover would have a problem securing enough batteries for I-Pace production, as the automaker only sold around 18,000 I-Paces in 2019, its first full year on sale.

“If it really is a true battery shortage, it’s strange that Jaguar (and Audi and Daimler) didn’t sign binding contracts with suppliers in advance,” Sam Jaffe, managing director at Cairn Energy Research Advisors, said. “Either they are facing internal pressures to avoid a too-succesful EV launch (which could cannibalize pre-existing model sales and anger their dealer networks), or they’re just bad at strategy.”

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