Jaguar Land Rover (JLR) will plough hundreds of millions of pounds into the British car industry by preparing one of its factories to build electric cars, in a much-needed boost for the sector.

JLR will modify its Castle Bromwich plant to build a series of three all-electric models, starting with an electric version of its luxury Jaguar XJ saloon, which is expected to launch next year.

The plans, first reported in the Sunday Times, are set to be announced on Friday. The investment is a positive move by Britain’s biggest carmaker, which has struggled amid decreasing demand for diesel models.

JLR lost £3.6bn last year after a huge writedown, and saw a 5.8 per cent drop in sales. The company is currently implementing a £2.5bn cost-cutting drive, which includes cutting 4,500 jobs. The 2,500 workers at its Castle Bromwich plant recently agreed to move to a four-day working week.

The decision comes at a crucial time for the UK’s automotive industry, which has struggled with a rapidly changing global market and continued uncertainty over Brexit.

Honda announced the closure of its Swindon in February, with the loss of 3,500 jobs. Ford recently said it will close its Bridgend plant in September, immediately affecting at least 1,500 jobs. French carmaker PSA Group warned last week that it will only build its new Vauxhall Astra in the UK if it avoids a no-deal Brexit.

JLR currently produces the high-end electric Jaguar I-Pace SUV, and said it plans to “offer customers electrified options on all new models from 2020”.

Nissan already manufactures its electric Leaf car in Sunderland, and BMW will begin to assemble the electric mini at its Oxford factory from November, using batteries imported from Germany.

Today also marks the introduction of new EU rules stating new electric vehicles will have to be fitted with a device that mimics the sound of a traditional engine. The devices, introduced following concerns that electric cars and vans pose a risk to pedestrians because they are too quiet, must sound when vehicles are reversing or travelling below 12mph.

JAGUAR Land Rover (JLR) will plough hundreds of millions of pounds into the British car industry by preparing one of its factories to build electric cars, in a much-needed boost for the sector.

JLR will modify its Castle Bromwich plant to build a series of three all-electric models, starting with an electric version of its Jaguar XJ saloon, expected to launch next year.

The plans, first reported in the Sunday Times, are set to be announced on Friday. The investment is a positive move by Britain’s biggest carmaker, which has struggled amid decreasing demand for diesel models.

JLR lost £3.6bn last year after a huge writedown, and is currently implementing a £2.5bn cost-cutting drive. The 2,500 workers at its Castle Bromwich plant recently agreed to move to a four-day working week.

Meanwhile, new EU rules introduced today require electric vehicles to have a device mimicking the sound of a traditional engine, amid fears they pose a risk to pedestrians.