Jaguar Land Rover’s Jaguar brand will be all-electric by 2025, the carmaker has said.
The company will launch electric models of its entire Jaguar and Land Rover line-up by 2030, it added.
The firm said it would keep all three of its three British plants open as part of its new strategy.
However, it has dropped plans to build an electric version of its XJ luxury saloon model, which was to have been built at its Castle Bromwich plant.
Chief executive Thierry Bolloré said the Castle Bromwich plant would focus instead on “non-production” activities in the long term, without giving details.
Shares in JLR’s India-based owner, Tata Motors, rose as much as 3%.
The company plans to spend about £2.5bn a year on new technology for its cars.
It will also invest in hydrogen fuel technology. Despite operating through combustion, hydrogen burns to produce only water as a by-product.
Transport Secretary Grant Shapps said the announcement was “a huge step for British car manufacturing”.
Carmakers are under pressure to meet stringent carbon emission demands in Europe and China, as well as customer demand for high-performance electric cars with a luxury or performance feel.
The UK plans to ban the sale of new petrol and diesel cars from 2030.