Jaguar Land Rover’s owner has confirmed it will invest £4 billion to build a gigafactory in the UK, in a major boost for the British automotive sector and following months of speculation.
Tata Group – the Indian conglomerate who have owned JLR since 2008 – said that its investment in the new 40GWh battery plant will create 4,000 direct jobs and represents one of the largest ever in the UK auto industry.
The giant Somerset-based gigafactory will provide almost half of the battery production needed by 2030, when a ban on the sale of new petrol and diesel cars comes into place.
It represents a major win for Britain’s hard-pressed motor sector, which has repeatedly warned that the government is not doing enough to secure its position in the global race to transition to electric vehicles (EVs).
Prime Minister Rishi Sunak said: “Tata Group’s multi-billion-pound investment in a new battery factory in the UK is testament to the strength of our car manufacturing industry and its skilled workers.”
“With the global transition to zero emission vehicles well underway, this will help grow our economy by driving forward our lead in battery technology whilst creating as many as 4,000 jobs, and thousands more in the supply chain.”
Tata’s chair, Natarajan Chandrasekaran, said: “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.”
Testament to the strength of our car manufacturing industry and its skilled workers.PM Rishi Sunak
The UK government had been locked in a battle with Spain to host the plant, with Tata reportedly asking for £500 million in state assistance.
Confidence had been growing that it would pick Somerset over Spain, with reports in late May that the Mumbai-based group’s chair was to fly to the UK to finalise a deal.
However, nearly two months of silence had left those in the industry quietly concerned over the state of Britain’s bid, which was seen as pivotal in shifting the countries’ fortunes in the EV market and boosting its flagging battery making capacity.
The deal’s confirmation today means the UK now has two gigafactories on the cards, with the other operated by the Chinese company Envision in Sunderland, to supply the Japanese carmaker Nissan.
It comes just over six months after the failure of Britishvolt, the Northumberland battery plant startup which collapsed in January.
Tata’s decision still leaves the UK far behind the European Union, which as of early June had 25 gigafactories in operation, under construction or planned.
Business and Trade Secretary Kemi Badenoch said: “Today’s multibillion-pound investment demonstrates that this Government has got the right plan when it comes to the automotive sector.
“We are backing the UK car industry to help grow our economy as we transition to electric vehicles, and this latest investment will secure thousands of highly-skilled jobs across the country.”
UK battery sector welcomes news
Members of the UK’s battery industry welcomed the news of Britain’s successful bid, but cautioned that it would not solve the problems facing the sector by itself.
Quentin Willson, founder of FairChargeUK: “While this is a very significant development for UK battery manufacturing, I truly hope that other companies in the battery, critical minerals, charging and EV supply chains won’t be neglected.”
“The government should see this subsidy as the beginning of building a battery ecosystem in this country. There is a genuine fear in the industry that it could sweep up all available government support, which would be hugely detrimental to the future health of the UK in the race to zero.”
Dr Diana Mehta, chief scientist at the Battery Recycling Company said “this announcement is instrumental in ensuring the UK remains competitive in the battery race,” but added that gigafactories are “only one element of a thriving battery industry.”
“Similar attention and support must be given to the rest of the battery supply chain, both upstream and downstream.”
Suzanna Hinson, battery workstreams lead at the Green Finance Institute, said that while the investment would be 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.”
Britain’s EV industry has also been plagued by Brexit related troubles, with carmakers including Stellantis warning in March that new so-called ‘rules of origin’ tariffs, which will come into force next year could cause it to close down factories.