Beijing: Jaguar Land Rover is planning to build an electric vehicle in China as the iconic British manufacturer steps up its game in a fast-growing market where other luxury marques from Audi to Mercedes-Benz are plowing money to gain leadership.

The automaker, which already makes the gasoline-powered E-Pace compact sport utility vehicle locally with its Chinese partner Chery Automobile Co., will try to fully use its current capability in the Asian country to produce an EV such as the I-Pace, Murray Dietsch, president of the joint venture, said in an interview Wednesday in the eastern Chinese city of Changshu. The details will be disclosed within a year, he said.

“Our expectation is the penetration of EV will continue to grow more than linearly,” Dietsch said. “With the combination of the enhancement in SUV market and the expectation of higher penetration of battery-electric vehicles, you will see more battery-electric SUVs in the market in the future.”

Jaguar Land Rover, owned by Tata Motors Ltd., is seeking to tap growing demand for electric vehicles in China as the government promotes zero-emission automobiles to fight pollution and cut oil imports. In the race for market share, it faces formidable rivals. Billionaire Elon Musk is already preparing to set up a local Tesla Inc. factory, while Volkswagen AG’s Audi plans five new-energy models for the country by 2022. Daimler AG is spending 655 million euros ($764 million) to make Mercedes EVs with a domestic partner.

Getting ready

China is moving to cap carbon emissions by 2030, which means automakers will need battery-powered vehicles for the market. Sales of new-energy vehicles — a category that includes battery-powered, plug-in hybrid and fuel-cell automobiles — reached 777,000 units last year and could surpass 1 million this year, according to estimates by the China Association of Automobile Manufacturers. The government’s target is 7 million vehicles a year by 2025.

“For the next three to five years, obviously our focus is getting ourselves ready for the policy changes on new-energy vehicles,” Dietsch said. “We’ve got a very detailed plan for us to be able to comply as you expect.”

As the Chinese market may be “more demanding” than the rest of the world, Chery Jaguar Land Rover Automotive Co. will first introduce “derivatives” of vehicles here before they get launched elsewhere, Dietsch said. The partnership is boosting spending on research and development and also plans to produce one new vehicle in China annually over the next three to five years, he said.

European makers aren’t JLR’s only competitors. While the brand clocked a 23 per cent jump in sales last year in China to 146,399 units, it is still trying to catch up with the American Cadillac that grew faster at 45 per cent, selling 174,437 cars. It also needs to contend with some of the aspiring Chinese brands such as Geely Automobile Holdings Ltd.’s Lynk & Co.

With the E-Pace compact SUV added to its local portfolio, Dietsch expects sales of Jaguar Land Rover in China will outpace the overall growth of the premium car segment, which is set to jump 15 per cent to 18 per cent this year.