Tata Group plans to build a £4 billion ($5.2 billion) battery plant in the UK to supply electric vehicles made by Jaguar Land Rover Automotive Plc, in a win for Britain’s struggling car industry.
JLR and Tata Motors Ltd. will be anchor customers for the plant capable of providing 40 gigawatt hours worth of batteries with supplies starting from 2026, according to a statement. The factory could supply roughly half a million vehicles per year depending on the size of the batteries.
The decision marks a significant victory for the UK government, which fended off competition from Spain for the factory. Britain’s auto industry has been struggling to compete with generous incentive packages for green technology in the US and European Union.
The UK government “fought very hard” for the plant after Tata informed ministers nine months ago that it planned to pick another country, Energy Secretary Grant Shapps told the BBC on Wednesday. The financial incentive the UK gave Tata was large, he said, while refusing to give the exact size of the subsidies.
Shapps said the UK’s plan to have among the lowest energy prices in Europe helped to attract Tata, in a separate interview with Times Radio.
Tata has chosen a site in Somerset, west England, owned by Salamanca Group, an investment and advisory business with roots in real estate, Bloomberg News reported on Tuesday.
Shares of Tata Motors rose 1.7% in Mumbai trading.
Political Boost
The deal will create around 4,000 jobs and supply JLR electric vehicles including Range Rover, Defender, Discovery and Jaguar models.
Its timing could be helpful for Prime Minister Rishi Sunak, whose Conservative Party is struggling in the polls and facing a series of tough by-elections including three on Thursday.
One of the elections, in which the Conservatives risk losing parliamentary seats, is in Somerton and Frome — a mere 30 minutes from where the JLR battery plant is due to be built.
The UK’s car manufacturing sector, once a core part of the economy, has been struggling to cope with Brexit and the shift to electric vehicles. The company at the center of a proposed battery factory in the northeast of England, Britishvolt Ltd., fell into administration earlier this year.
European carmakers have been raising the alarm over upcoming tariffs on electric vehicles shipped between the UK and EU, unless much of their parts come from within the region. UK officials have not yet persuaded Brussels to delay the deadline.
The Tata factory “is a shot in the arm for the UK automotive industry,” said Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.
The move will help JLR accelerate its shift to cleaner vehicles. JLR is planning to invest £15 billion over the next five years in developing electric cars as well as autonomous-driving features.
--With assistance from Craig Trudell.
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