According to those briefed about the plans of the Indian group, Tata Motors will announce plans to build an electric car battery factory in the UK that will supply Jaguar Land Rover.
Tata, the owner of JLR has selected a site for its gigafactory in Somerset, south-west England, over an alternative location in Spain. The decision is expected on Wednesday.
In May, UK Prime Minister Rishi sunak met secretly with Natarajan Chandrasekaran (chairman of Tata Sons), in order to jump-start Britain’s efforts in joining the global race to produce electric cars.
Tata has requested £500mn in state assistance from UK. This includes subsidies for the Somerset Factory’s high energy use, an one-time grant from the Government’s £1bn Automotive Transformation Fund, and improvements to the road near the M5 Motorway.
Tata Group’s spokesperson stated: “We do not have any additional information at this time.” Downing Street refused to comment. However, government insiders reported that they expect Sunak to visit JLR’s vehicle manufacturing centre in the Midlands by Wednesday.
The government sees securing the proposed JLR Battery Factory at Bridgwater, Somerset as a win-win situation as it looks to support the UK auto industry which has been struggling with the transition from electric vehicle production.
A vote of confidence for British industry will also boost the morale of Conservative Members of Parliament as they prepare to lose three by-elections this Thursday, Uxbridge, Selby, and Ainsty, in North Yorkshire and Somerton, and Frome, in Somerset.
The proposed factory in Bridgwater would boost the economy of the South-West as it is located close to the Somerton & Frome constituency.
The Gravity Industrial Park near Bridgwater, which is where the battery factory would be located, has bosses who believe the factory can employ over 5,000 employees.
Bookmakers predict that the Liberal Democrats will win with a high probability the Somerton-Frome by-election while Labour has a good chance of winning Uxbridge and Selby. On Thursday, MPs will break for the summer recess.
The slow deployment of battery factories to power electric cars has been a major problem for Britain.
In 2021, Nissan announced plans to build the UK’s largest battery factory at its Sunderland facility in north-east England. The gigafactory is being built in partnership with Chinese battery manufacturer Envision.
Britishvolt, a start-up company with ambitious plans for a gigafactory to be built in the north-east of England, went into administration at the beginning of January. A group from Australia bought parts of the company with the intention of revitalizing the plans.
Last month, Sir Geoffrey Owen of Policy Exchange, a think-tank and former Financial Times editor wrote a paper that highlighted the 25 gigafactories currently in operation or under construction in Europe.
Sunak will hail Tata’s decision of building Britain’s second gigafactory as proof that the UK is competitive. Tata had been planning to build a factory in Somerset, with Envision.
Jonathan Reynolds, the shadow business secretary, welcomed this news, but added that a Labour Government would go even further and invest in eight gigafactories, to make sure “announcements such as these aren’t just a one-off”.
According to those briefed about the talks, the government had been in parallel discussions with Tata regarding its UK steel operation and the JLR megafactory. However, the two discussions are now “decoupled”.
Tata Steel has received state assistance worth more than £300mn to maintain its Port Talbot Steelworks, in South Wales.
JLR will release an all-electric Range Rover in 2019. It is one of seven battery-powered vehicles as part of the £15bn electrification program, which aims to catch-up with competitors such as Mercedes-Benz and BMW.
Tata originally planned to announce the Somerset plant last autumn, but the company delayed its announcement amid the political turmoil that erupted in the UK after Boris Johnson’s replacement as Prime Minister by Liz Truss followed by Sunak.