Tata Motors-owned Jaguar Land Rover (JLR) is set to build its first all-electric car in Austria.
The luxury car-maker's Jaguar brand could begin production of the vehicle next year.
JLR's electric debut would be the latest in a string of launches after its new XE "baby Jag" and F-Pace sports utility vehicle, as well as a new factory in China and one under construction in Brazil.
The company is believed to be devising plans for a small production line in Austria, making about 10,000 cars a year, by leasing space in an existing factory, according to The Sunday Times.
Jaguar wants to build an electric vehicle, in part to sidestep looming European Union emission fines.
Manufacturers are racing to produce electric and hybrid cars, with Germany's BMW enjoying surging sales of its i8 and i3 petrol and electric plug-in hybrids.
The Tata Group, which paid USD 2.3 billion in 2008 to buy JLR from Ford and has more than doubled the workforce to 32,000.
The company now sells almost half-a-million cars.
The firm is also exploring plans for a factory in America.
"Jaguar Land Rover continues to evaluate opportunities in a range of markets to increase our global manufacturing footprint in the future," the company said in a statement.
Discussions on all manufacturing plans remain commercially confidential. No decision has been taken on future manufacturing locations, it said.