Struggling automaker Jaguar Land Rover (JLR) is being accused of breach of contract by one of its semiconductor chip suppliers, Wolfspeed.
The North Carolina-based chipmaker — which filed for bankruptcy protection last summer — claims Jaguar failed to pay what it owed after buying fewer products than required under a take-or-pay supply agreement.
According to a court document, first reported by Law360, JLR agreed to pay an annual deposit tied to potential purchase shortfalls, under an Assurance of Supply Agreement (ASA) signed in April 2022.
In return, Wolfspeed agreed to give JLR priority access to its chips and to ensure it could meet the carmaker’s expected demand.
However, starting last year, JLR refused to honor its obligations under the ASA, the lawsuit reads.
After the chipmaker demanded that the payments were made, JLR “contended its nonperformance was excused because of delays in qualifying certain parts to be supplied under the ASA.”
This qualification is the testing JLR must complete to ensure Wolfspeed’s chips meet its requirements — which, according to Wolfspeed, JLR is responsible for, therefore not being a valid excuse to breach the agreement.
“JLR is responsible for any delays in the part qualification process and cannot use those delays to excuse its nonperformance under the ASA,” the complaint stated.
In addition to the breach of contract, Wolfspeed has filed a claim of breach of the implied covenant of good faith and fair dealing.
The company asks the court to award compensatory damages, to be determined at trial, including all direct, indirect, consequential, incidental, and special damages that Wolfspeed is entitled to under the law.
Wolfspeed x JLR
In an interview with UK media outlet Autocar in June 2022, former CEO Thierry Bolloré admitted that the company struggled to cope with the semiconductor shortage at first, before readjusting its approach to chip supplying.
“To be candid, we were not very good when the difficulties first emerged. We were unprepared and we were quite naive,” Bolloré said.
The chief executive noted that Jaguar “had up to 140 suppliers, and in some cases we didn’t even know where the semiconductors were in our cars.”
“But we have worked extremely hard on the problem,” he clarified, adding that, as of then, Jaguar had “far fewer favoured suppliers — fewer than a double-digit number — and we have worked with them to make huge improvements.”
JLR’s supply agreement with Wolfspeed was first announced in October 2022.
By then, the carmaker flagged that their partnership would help the company’s Reimagine strategy, under which Jaguar began its transition to a fully-electric luxury brand.
“Wolfspeed’s advanced Silicon Carbide technology will be used specifically in the vehicles’ inverter, managing the transfer of power from the battery to the electric motors,” the company said in a joint statement.
Thierry Bolloré said then that Jaguar and Wolfspeed were “not strangers, having collaborated together with the Jaguar TCS Racing team for the last five seasons.”
“By developing that into a strategic partnership as part of our Reimagine strategy, we can integrate Wolfspeed’s advanced Silicon Carbide technology into our next generation electric vehicles, delivering extended range and performance capabilities for our clients,” the CEO added.
The UK automaker said Wolfspeed’s semiconductor chips would be first available with Range Rover models in 2024 and, then, in the upcoming all-electric Jaguar model in 2025.
A few months earlier, Jaguar Land Rover had announced a partnership with Nvidia, focused on software‑defined, advanced automated driving systems for next‑generation vehicles starting in 2025.
EV Strategy
However, since Bolloré introduced the Reimagine strategy in 2021, Jaguar has struggled to fulfill its promise of a fully electric lineup.
Dealers have questioned the demand for these vehicles — for which a concept car, revealed in late 2024, was considered underwhelming — and the brand’s marketing strategy has faced widespread criticism within the industry.
The company underwent major executive changes, with Bolloré stepping down in late 2022 and being succeeded by longtime Jaguar executive Adrian Mardell, initially as interim CEO and later confirmed in the role. He retired last year.
Newly appointed CEO PB Balaji dismissed Chief Design Officer Gerry McGovern late last year.
Earlier this month, British media outlet The Times reported that Jaguar was considering adding extended-range electric vehicles (EREVs) to its future lineup, signaling a shift away from its plan to sell only fully electric luxury vehicles.
However, the carmaker denied the plans, telling Automotive News Europe a few days later that their “plans to reinvent Jaguar as an electric-only luxury automotive brand are unchanged.”
