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Tata Group on Wednesday announced plans to build a £4bn flagship battery factory in the UK to supply Jaguar Land Rover, in a big boost to a domestic car industry that is struggling to adapt to the era of electric vehicles.
The Indian group, which owns JLR, confirmed on Wednesday it had chosen a UK site for the gigafactory, which will start supplying the British carmaker and Tata Motors from 2026.
The gigafactory, earmarked for a site near Bridgwater in Somerset, south-west England, is expected to create 4,000 jobs directly and many thousands more indirectly. Tata said the investment was worth £4bn.
Rishi Sunak, UK prime minister, hailed a development that would accelerate the sluggish transition of Britain’s car industry from petrol and diesel cars to electric vehicles.
He said: “It will not only create thousands of skilled jobs for Britons around the country, but it will also strengthen our lead in the global transition to electric vehicles, helping to grow our economy in clean industries of the future.”
Sunak held secret talks in May with Natarajan Chandrasekaran, chair of parent company Tata Sons, in an effort to secure the factory.
Chandrasekaran said in a statement on Wednesday: “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.”
Grant Shapps, UK energy secretary, declined to say how much the UK government had offered Tata in subsidies.
Tata had asked for £500mn and had previously said it was considering placing the gigafactory at an alternative location in Spain.
Asked on the BBC Radio 4 Today programme whether the total support package could finally come to £1bn, Shapps said: “No, not directly.”
UK state support is expected to come in the form of a direct grant, local transport improvements and the promise of cheaper energy bills. “It is large, I make no bones about that,” he said.
Shapps said Tata’s decision was the “biggest investment ever” in the UK automotive industry, and the most significant boost for the sector since Japanese car companies moved to Britain in the 1980s.
“This is a big vote of confidence for the British economy and puts Britain in the fast lane for electric vehicle production,” he added.
Shapps said the Bridgwater site, which is close to the new Hinkley Point C nuclear plant, could produce enough batteries not just for JLR but to supply “half the EVs we will need by the 2030”.
Tata did not specify in its press release exactly where in the UK the gigafactory would be built, in a nod to electoral rules restricting sensitive government announcements ahead of elections.
Voters in Somerton and Frome, close to the site of the Somerset gigafactory, will cast their ballots in a parliamentary by-election on Thursday.
The Liberal Democrats are expected to easily seize the seat from the Conservatives.
Labour officials said Tata sought reassurance from the party that JLR would keep government support if they win the next election, expected in 2024, in a sign business expects a change of government soon.
Tata, which dominates the market for electric cars in India, is also aiming to manufacture batteries in its home country.
Last month, its battery subsidiary signed an agreement with the western state of Gujarat, committing a Rs130bn ($1.6bn) investment for a lithium-ion cell plant.