Jaguar will take on the BMW M3 and Mercedes-AMG C 63 S with a new V8-powered flagship that will sprint to 100km/h in less than five seconds, according to British magazine, Autocar.
The fastest XE sedan is expected to share the 5.0-litre V8 that’s under the bonnet of the current F-TYPE roadster and coupe.
According to Jaguar sources speaking to the British car mag, engineers have said the bent-eight is easier to fit under the XE’s bonnet than the new range of Ingenium petrol and diesels.
Both springs and dampers will be retuned for the XE-R and the British M3 rival is expected to come with Jaguars electronically controlled limited-slip differential.
After the XE-R's launch an even more powerful 400kW hard-core version of the XE could be developed by Jaguar’s new performance arm, SVO.
Expected to be called XE-RS, the most extreme small sedan could be powered by an even more potent supercharged version of the 5.0-litre V8 and rely on weight-saving materials like carbon-fibre for even great performance.
As well as the new M3 rival, Jaguar is also believed to be plotting a V8-powered version of its F-PACE SUV.
The production version of the F-PACE will be revealed at the Frankfurt motor show, but it’s not known when the two high-performance XEs will first be shown.
At this week's global launch of the XE, Chief Program Engineer Andy Gilham conceded the blown V8 would fit in the XE's engine bay.
"If you dropped it from high enough I'm sure the V8 would fit in the XE," the veteran engineer told motoring.com.au.
"It's no secret the V6 and V8 are architecturally very similar. The question is what do we do in what order? What's going to generate an appropriate level of demand from customers to make a sensible business case.
"And right now we think the V6 is the right engine for the performance model of XE.
"This is the launch, this is the start, and ... there's plenty of stuff coming down the engine pipeline and plenty of stuff coming down the vehicle pipeline too. But equally I can't speculate or disclose what we might be doing."
"The board always want it now. They set out a cycle plan of course and product actions are set out and approved by the board. We're an ambitious business and we're growing as rapidly as we can, and you always want everything as quickly as you can have it. So yeah there's a continual pressure. There should be.
Gilham indicated it was a matter of when, not if, the XE range will be bolstered by more engines and body styles, including wagon, coupe and convertible.
"It's fair to say there's potential to look at putting it [V8] in the XE. We've got this big portfolio of stuff we could do. You look at the [BMW] 3 Series and you could do a wagon, you could do a coupe, a convertible, a folding hard-top, smaller engines, V8s, sixes, yeah we could. But we can't do it all at once. We're kind of busy at the moment. We've got XE, in a few month's time new XF, then F-PACE which is a massive deal for us.
"There's all that product coming off this architecture being rolled out, and yes we're doing other stuff in the background and there's future models of XE and XF and F-PACE already planned. We're pretty stretched but it's a good place to be. I'm not complaining."