Jaguar Land Rover Owner Tata Confirms £4bn Investment in UK Battery Factory
Tata, the owner of Jaguar Land Rover, has confirmed plans to build its flagship electric car battery factory in the UK. The new plant in Somerset is expected to create 4,000 UK jobs and thousands more in the broader supply chain. Tata announced a £4bn investment in the site, with government subsidies worth hundreds of millions of pounds understood to be part of the deal.
This plant is seen as the most significant investment in the UK automotive sector since Nissan arrived in the 1980s. The new gigafactory, with a capacity of 40GWh, will be one of the largest in Europe, producing batteries for Jaguar Land Rover vehicles like the Range Rover, the Defender, and other Jaguar models. The factory will also supply batteries to other car manufacturers, with production expected to begin in 2026.
Tata has been in negotiations for months to secure state aid for the project. Prime Minister Rishi Sunak stated, "With the global shift to zero-emission vehicles well underway, this will help grow our economy by driving forward our lead in battery technology while creating up to 4,000 jobs and thousands more in the supply chain."
Liberal Democrat Treasury spokesperson Sarah Olney MP welcomed the investment, noting that it addresses years of neglect of the South West by government investment.
The plant is Tata's first outside of India and is expected to aid the UK's automotive industry in transitioning from petrol and diesel to electric vehicles. With batteries representing over half the value of an electric car, a reliable supply is crucial for the future of the UK auto industry.
The government has faced criticism for lacking a clear industrial strategy and falling behind the US and EU in attracting investment in low-carbon technologies. Some industry insiders hope Tata's battery investment will pave the way for further investments in the UK.
Currently, the UK has only one operational plant next to Nissan's Sunderland factory and another in the planning stages in Northumberland. Another proposed battery manufacturer, Britishvolt, went into administration earlier this year. In contrast, the EU has 35 plants open, under construction, or planned.
Shadow Business Secretary Jonathan Reynolds welcomed Tata's new plant and emphasized that Labour has plans for the automotive sector that would create tens of thousands of jobs. He said his party would ensure that "news like this isn't a one-off but the basis for a growing economy with good jobs in our industrial heartlands."
The government has set a series of net-zero goals, including a ban on the sale of new petrol and diesel cars from 2030. However, its latest five-year program has been criticized for lacking the necessary funding and legislation to meet those goals. The UK also exports a significant number of cars, and its overseas markets are committed to transitioning to electric vehicles.
Tata Group, an Indian multinational, considered a competing site in Spain for the battery plant. Its decision to choose the UK is likely to be seen as a significant win for the British government. Sources indicate that a substantial level of subsidy has been offered, likely in the form of cash grants, discounts on energy costs, and funding for training and research. The exact size of the incentive package has not been disclosed.
In addition to owning Jaguar Land Rover, Tata has significant steel interests in the UK, including the Port Talbot plant in South Wales. The government is also expected to offer around £300m to subsidize, upgrade, and decarbonize those operations.
A UK government spokesperson declined to comment on ongoing negotiations with a private company.
Parliament's cross-party Business and Trade Committee is holding an inquiry into the UK's electric vehicle battery manufacturing sector. Its chairman, Darren Jones, said Tata's decision to site the new plant in the UK was "extremely welcome" but raised questions about the scale of the subsidies provided.
"We will want to reflect, however, on the subsidy package that was required to secure this decision and if this approach is scalable to meet the demand for additional battery manufacturing sites for other car companies across the UK."
These concerns were echoed by the FairCharge group, representing other companies in the electric vehicle sector. FairCharge's founder, Quentin Willson, expressed fears that Tata's investment could "scoop" all available government support.
"I really hope that other companies in the battery, critical minerals, charging, and EV supply chains won't be overlooked," he said.
"Support needs to come in all shapes and sizes for companies of all sizes and shapes," he claimed. "One gigafactory doesn'' t equal success, it equals part of the challenge. ".