Ineos Automotive is searching for sites to move production of its flagship 4x4 vehicle from France to the US, as its billionaire owner Sir Jim Ratcliffe continues to pump cash into the struggling carmaker.
Chief executive Lynn Calder told the Financial Times the group aimed to start producing its Grenadier off-roader in America "as quickly as possible" to meet local demand.
The automotive division lost €290mn last year, down from €323mn in 2023, and has now been hit by President Donald Trump's 15 per cent tariffs on European car imports.
Its parent company Ineos Industries Holdings, the chemicals giant owned by Ratcliffe, pumped nearly €600mn of debt into Ineos Automotive in 2024, pushing outstanding debt to more than €3bn, according to accounts published this week.
Ineos makes the Grenadier in a former Mercedes-Benz factory in Hambach, north-eastern France, that it bought in 2020, although most vehicles are sold in the US. The vehicle is pitched as a rival to the Land Rover Defender.
Calder said that the economics of producing cars in France to sell in the US was challenging: "Europe is a high-cost location to manufacture anything, quite frankly . . . and now you add the tariff on top of that, for sure, it's made things a lot more challenging."
She also warned that Europe's car market faced an existential threat from Chinese electric vehicles. "Europe . . . has opened the door to cheap and impressive Chinese vehicles that, if we're not careful, are going to take over," Calder said. "Europe's unique problem is one of the survival of the automotive industry."
Grenadier sales jumped 40 per cent last year compared with 2023, with revenue rising 57 per cent to €789mn.
Calder said the company was now looking for a suitable US site to supply American buyers. Calder said she was open to all options, including building a factory or using other manufacturers' excess capacity.
However, moving Grenadier production to the US will depend on clarity about the EU's petrol engine ban that is due to take effect in 2035. Ineos cannot make such an investment before knowing it would be able to use the French plant to produce its new Fusilier.
It is being developed as both a pure electric model as well as one with a "range-extending" petrol engine that can charge the battery when needed -- technology that would not be allowed after 2035 under existing EU regulations.
Calder said she was "hopeful" of a change in approach by the EU.
One union representative told the FT earlier this year of concerns over the sustainability of its French plant, which employs more than 1,000 workers, partly because of the threat of US tariffs on European car imports.
The struggling carmaker has faced a string of setbacks in the past year. In March, it recalled more than 7,000 Grenadiers because of a door problem, while it paused production at its French plant from September to December last year after a critical supplier went bust.
Ratcliffe's empire is grappling with other challenges. Rating agency Fitch last month cut Ineos further into junk territory because of its high leverage levels. The billionaire has also shut down sites including an oil refinery in Grangemouth, Scotland, and cut staff at Manchester United, the Premier League football club that he co-owns.
Ineos Automotive also more than doubled its borrowings from banks to €232mn last year as its cumulative losses reached €1.4bn since it was founded in 2018.