Jaguar Land Rover (JLR) has reported significant financial losses for the second quarter, attributing a substantial portion to a cyber-attack that targeted one of its suppliers. The luxury car manufacturer posted overall pre-tax losses of £524 million, which is equivalent to approximately $639 million.

Within these quarterly results, JLR identified exceptional charges amounting to £212 million, or $258 million, directly related to the consequences of the cyber incident. The attack, which occurred in October 2022, caused major disruptions to the company’s production and wholesale operations.

Financial Impact and Production Halts

The cyber-attack on the third-party supplier had a direct and quantifiable impact on JLR’s ability to manufacture and deliver vehicles. During an investor call, JLR’s chief financial officer, Adrian Mardell, addressed the “supplier cyber-issue.” He confirmed that the incident was a key factor in the company’s performance for the quarter.

The disruption prevented the company from shipping an estimated 7000 units during the period. The financial filings reflect the costs associated with this production halt and the subsequent recovery efforts. The reported £212 million charge underscores the significant financial damage that can result from security breaches within the automotive supply chain.

Mitigation and Recovery Outlook

In response to the production disruption, Jaguar Land Rover has been taking action to mitigate the ongoing impact. The company has implemented measures, including switching to a manual process, to work around the issues caused by the supplier’s security breach. JLR’s leadership has communicated its expectations for resolving the situation.

The company stated that it anticipates the underlying issue stemming from the cyber-attack will be resolved by the end of the third quarter. Furthermore, JLR expects to recover the lost production volume throughout the second half of the year. Other factors contributing to the company’s quarterly losses included unfavorable foreign exchange revaluation and inflation.