Britain’s biggest vehicle manufacturer, Jaguar Land Rover, has warned it may have to rethink billions of pounds of UK investment, while its 40,000 British employees would face an uncertain future, if the UK leaves the EU single market.

The company said it needed greater certainty to continue to invest heavily in the UK, in a statement released two days before Theresa May is due to meet ministers at Chequers to discuss the post-Brexit deal they will seek with Brussels.

“A bad Brexit deal would cost Jaguar Land Rover more than £1.2bn profit each year,” said the firm’s chief executive, Ralf Speth. “As a result, we would have to drastically adjust our spending profile – we have spent around £50bn in the UK in the past five years, with plans for a further £80bn more in the next five. This would be in jeopardy should we be faced with the wrong outcome.”

The warning comes after other major employers, BMW and Airbus, said their positions in the UK would be in doubt if their production processes were threatened by the terms of the UK’s post-Brexit relationship with the EU.



In his statement, Speeth said: “Jaguar Land Rover’s heart and soul is in the UK. However we, and our partners in the supply chain, face an unpredictable future if the Brexit negotiations do not maintain free and frictionless trade with the EU and unrestricted access to the single market.

“We urgently need greater certainty to continue to invest heavily in the UK and safeguard our suppliers, customers and 40,000 British-based employees.”

Jaguar Land Rover has said that all of its new vehicles will be electrified from 2020 onwards; processes that offer “significant economic and productivity opportunities”, Speeth said. “Get Brexit wrong and British people, businesses and broader society lose the chance to lead in smart mobility.”

He added: “For more than 250 years, since the era of Adam Smith, Britain has championed free markets and made the case for free trade. If the UK automotive industry is to remain globally competitive and protect 300,000 jobs in Jaguar Land Rover and our supply chain, we must retain tariff and customs-free access to trade and talent with no change to current EU regulations.”

In response to the statement, the business secretary Greg Clark said Jaguar Land Rover was a “great British success story” that ministers were “determined to make sure ... can continue to prosper and to invest in Britain”.

Officials in Brussels have already dismissed a draft of May’s Brexit plan as unrealistic, with one hinting that they felt the UK was trying to have its cake and eat it. “We read the white paper and we read ‘cake’,” the official told the Guardian on Monday.

It is believed that the prime minister favours a proposal that would have the UK remaining within the single market for good, while restricting the commitment to freedom of movement of people. But EU officials are thought to be dead against abandoning one of the bloc’s founding principles.

Jean-Claude Piris, a former head of the EU council’s legal service, said: “The EU is in difficulties at the moment; the one and only success which glues all these countries together is a little bit the money and the internal market. If you fudge the internal market by allowing a third state to choose what they want ... it is the beginning of the end.”

In March, Airbus, which employs 15,000 people in the UK, warned it would have to consider its position in the UK if it did not get clarity over Brexit, citing the need to decide soon whether or not border delays after the UK left the EU would require it to start stockpiling parts.



“It’s critical for our business to ensure that the wings that we build in [the UK] can get to France and Germany for the final assembly line,” said Katherine Bennett, the senior vice-president for Airbus in the UK.

She added that Airbus spends about £5bn each year on its UK supply chain, stressing that it was “really important that the parts don’t get held up in warehouses”.

In June, BMW said 8,000 UK-based jobs would be at risk if delays were caused to its supply chain post-Brexit.

“We always said we can do our best and prepare everything, but if, at the end of the day the supply chain will have a stop at the border, then we cannot produce our products in the UK,” its customs manager, Stephan Freismuth, told the Financial Times.

“We don’t want to give up our UK plants. We do our best to maintain business continuity. If you have a stop for one day, it costs a lot of money, but at the end if there are more stops our management has to decide how this can be sorted.”