Jaguar Land Rover, Britain’s largest carmaker, has revealed that as many as 500 jobs are at risk as it ends the night shift at its Halewood factory in the latest blow to workers in the embattled UK auto industry.

About 10% of the jobs at the factory could be affected, JLR said on Wednesday. The plant near Liverpool employs just under 4,000 people, as well as about 500 agency workers. Across the UK, JLR employs about 33,000 workers.

JLR, which is owned by India’s Tata Motors, said the cuts were related to improving efficiency rather than cutting production volumes. However, it is thought that slower-than-expected growth in demand for the Range Rover Evoque and Land Rover Discovery Sport models that are produced at Halewood contributed to the need for job cuts.

The latest job cuts come amid a £2.5bn cost savings drive by JLR, as it tries to free up resources to make major investments in electric vehicles. At the same time JLR and other British automotive factories are facing the prospect of a hard Brexit that could see the UK knocked out of alignment with EU regulations, and the continued decline of diesel cars across Europe following emissions cheating scandals. The US treasury secretary, Steven Mnuchin, also indicated on Wednesday that tariffs could be imposed on UK car imports if the government pushes ahead with plans for a digital tax on American tech giants.

Des Quinn, national officer for the Unite trade union, said: “This is a further blow to the UK car industry in general and to our members at Halewood in particular.”

In a statement, JLR said: “This will deliver significant operating efficiencies at the plant, while enabling us to meet the growing customer demand for our new Range Rover Evoque and Land Rover Discovery Sport.”

JLR said it would move to a “two-plus” shift pattern, with early and late shifts, as well as the possibility of longer hours if demand increased. The new shift pattern was agreed in pay negotiations with unions last year.

JLR has already cut thousands of jobs in recent years, with 1,000 job losses at its Solihull factory in 2018 and another 4,500 redundancies across the world announced in January 2019.

Other car manufacturers with factories in the UK – almost all of which are foreign-owned – have cut back on investment or announced factory closures, with Ford’s Bridgend engine plant and Honda’s Swindon factory both due to close in the next two years.

“The challenges being faced at JLR are also being experienced by other UK car factories,” said Quinn.

“The UK’s car industry has plummeted from being the jewel in the crown of the UK’s manufacturing sector in a few short years, directly as a result of government inaction.”