Jaguar Land Rover’s parent company Tata Group is to build a £4 billion electric vehicle battery factory in Somerset, the UK government says.
The factory is expected to create 4,000 direct jobs, and many more in the wider supply chain. Production is due to start in 2026.
The FT reported that Prime Minister Rishi Sunak held secret talks with Natarajan Chandrasekaran, chair of Tata Sons, in May, to secure the deal.
Chandrasekaran said in a statement reported by the FT: “Our multi-billion-pound investment will bring state of the art technology to the country, helping to power the automotive sector’s transition to electric mobility, anchored by our own business, JLR.”
Today, the Tata group announced plans to establish a global 40GW battery cell gigafactory in the United Kingdom. Here’s a message from our Chairman N. Chandrasekaran on this occasion. #ThisIsTata pic.twitter.com/y7Oypj0S94— Tata Group (@TataCompanies) July 19, 2023
On Twitter, Prime Minister Rishi Sunak said “The new gigafactory will provide almost half of the car battery production needed in the UK by 2030. And it will mean the UK is perfectly positioned to be a global leader in battery technology.”
When I think of the iconic cars designed and made in Britain throughout history my mind goes to Aston Martin, Rolls Royce, Jaguar and Land Rover.— Rishi Sunak (@RishiSunak) July 19, 2023
Today marks a landmark day for the British auto industry and for two of those iconic brands in particular 👇🧵 pic.twitter.com/etqDpZeWL9
The BBC said “up to £500 million in government subsidies and grants have been offered to get this deal over the line”.
The Guardian reported that Tata had been “locked in negotiations for nine months to secure state aid for the project”. Tata had been considering an alternative site in Spain for the factory, but UK energy minister Grant Shapps told the BBC that “we have fought very hard for it”.
Simon Jack: UK-taxpayers are giving £500 million to Jaguar Land Rover owners Tata.— Farrukh (@implausibleblog) July 18, 2023
In a cost of living crisis, we will pay them to build a factory and they will keep the profits. pic.twitter.com/7usedG4GEj
UK energy minister Grant Shapps reportedly declined to say how much had been offered to Tata in subsidies, but described the deal as the “biggest investment ever” in the UK automotive industry.
The factory is near Bridgwater in Somerset, near to the Hinkley Point C nuclear plant which is currently under construction, and currently expected to become operational in 2028.
The factory will be one of the largest battery manufacturing sites in Europe when it becomes operational in 2026, with an output of 40GWh which will provide almost half the battery production which the Faraday Institution expects the UK will need by 2030.
Suzanna Hinson, battery workstreams lead, Green Finance Institute, has said: “While this investment is certainly an important foundation for building a thriving battery industry in the UK, further finance must be crowded in to enable the many innovative businesses that will support this ecosystem to scale.”
“Public capital can catalyse private investment into the space and does not need to exclusively be given in the form of grants, as there is huge potential for blended finance in this sector. The Green Finance Institute is working to develop blended finance structures such as a Battery Investment Facility to target the gap many businesses in this sector face in accessing mainstream funding once they exit the grant landscape to build out their operations.”
The revelation that Tata’s gigafactory has been secured with hundreds of millions of pounds of state subsidies could lead to concerns from other battery manufacturers who may not have the political leverage of Tata Group.
In the past, the UK government has given funding for battery manufacturing development in Scotland, while a gigafactory planned by Britishvolt in Northumberland collapsed in January 2023 when Britishvolt went into administration after failing to find additional investors. Britishvolt’s new owner, Australia-based Recharge Industries, plans to go ahead with a battery factory but serving the energy storage system (ESS) market.
Less than 24 hours after the news that Britishvolt was closing was announced, Andrew Forrest – the founder of the Australian iron ore giant Fortescue – unveiled plans for an advanced battery plant in Oxfordshire, according to Sky News.
In 2020, it was reported that Tesla was thought to be considering building a gigafactory in the UK, but the project has not materialised. The firm is active in the downstream ESS market however, providing its battery energy storage system (BESS) product, the Megapack, for many UK projects including one with Harmony Energy in 2022 and two for Fotowatio Renewable Ventures (FRV).
Current± publisher Solar Media is hosting its EV World Congress event in London this 10-11 October. The conference will focus on some of the key discussion points from across the EV sector including delivering coherent EV charging strategies, whether the UK is on course for its 2030 charging target, vehicle-to-grid (V2G) technology and more. More information, including how to attend, can be read here.