Tata Group to set up battery gigafactory in UK, to invest over 4 bn pounds

London: Indian conglomerate Tata Group on Wednesday announced plans to set up a global battery cell gigafactory in the UK at an investment of over 4 billion pounds, aimed to help power the automotive sector's transition to electric mobility.

The UK government, which hailed the group's plans for the 40GW battery cell gigafactory -- one of the largest in Europe, for EVs, said it will create thousands of jobs across the supply chain.

Tata Motors and its British subsidiary Jaguar Land Rover (JLR) will be anchor customers of the plant, the group said in a statement.

Production at the new gigafactory is due to start in 2026 and is pitched as a key driver behind British Prime Minister Rishi Sunak's priority to grow the UK economy.

Sunak hailed Tata Group's announcement as an "incredibly proud" moment for the country's automotive industry and described it as a testament to the strength of the UK car manufacturing industry and its skilled workers.

"Tata Group's multi-billion-pound investment in a new battery factory in the UK is a testament to the strength of our car manufacturing industry and its skilled workers," he said.

Sunak further said, "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," he said.

"We can be incredibly proud that Britain has been chosen as home to Tata Group's first gigafactory outside India, securing our place as one of the most attractive places to build electric vehicles,” the British prime minister said.

Later in the day in a tweet, Sunak, "The new gigafactory will provide almost half of the car battery production needed in the UK by 2030. And it will mean the UK is perfectly positioned to be a global leader in battery technology." Tatas' investment to build a new electric car battery factory in the UK "will drive forward our lead in battery technology", the British Prime Minister said.

"When I think of the iconic cars designed and made in Britain throughout history my mind goes to Aston Martin, Rolls Royce, Jaguar and Land Rover. Today marks a landmark day for the British auto industry and for two of those iconic brands in particular," he said.

The gigafactory will secure UK-produced batteries for JLR as well as other manufacturers in the UK and Europe. The location of the new gigafactory is expected to be in Somerset, south west England.

"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," Tata Sons Chairman N Chandrasekaran said.

Tata Sons is the promoter holding company of Tata group companies.

"With this strategic investment, the Tata Group further strengthens its commitment to the UK, alongside our many companies operating here across technology, consumer, hospitality, steel, chemicals, and automotive,” he added.

The Department for Business and Trade (DBT) said details of the government's incentives and support provided to the Tata Group as part of the agreement will be published in due course as part of regular transparency data.

However, reports in the lead-up to the announcement had indicated subsidies in the form of grants, energy subsidies and other training and research funding would be part of the agreed package.

The plant, being described as the most important investment in UK automotive since Nissan arrived in the 1980s, may have got subsidies worth hundreds of millions of pounds. Neither the company nor the UK government gave details of the subsidy provided.

It will supply JLR's future battery electric models including the Range Rover, Defender, Discovery and Jaguar brands, with the potential to also supply other car manufacturers. Production at the new gigafactory is due to start in 2026.

Tata is reported to have asked for £500 million of state assistance from the UK, including subsidies for the Somerset factory's high-energy use, a one-off grant from the automotive transformation fund, and road improvements to the site.

"Today's multibillion-pound investment demonstrates that this government has got the right plan when it comes to the automotive sector," noted UK Business and Trade Secretary Kemi Badenoch.

"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,” Badenoch said.

The investment of over 4 billion pounds is seen as a historic moment for the UK's growing electric vehicles (EV) industry, with JLR's suite of Range Rover, Defender, Discovery and Jaguar brands as the key customers.

The Tata investment is described as crucial to boosting the UK's battery manufacturing capacity needed to support the electric vehicle industry in the long-term and the new plant will cover almost half of the battery production that the Faraday Institution estimates the country will need by 2030.

"This is a huge vote of confidence in the UK and one that will drive growth in our economy, creating thousands of jobs and powering our transition to electric cars," said UK Chancellor Jeremy Hunt.

"Tata Group's gigafactory builds on the strength of our manufacturing industry and shows we're on the right track, backing the sectors that will underpin our future prosperity for decades to come," he said.

DBT said the government is committed to making the UK one of the best places in the world for automotive investment, as evidenced by the Automotive Transformation Fund (ATF), the British Industry Supercharger supporting industry energy needs, and the strong programme of support for research and development.

"This new gigafactory puts us firmly in the fast lane to becoming the capital of Europe's electric car market, and makes crystal clear how they see the UK as the place to be for their future growth," added UK Energy Security Secretary Grant Shapps.

"With thousands of jobs on-site and in the supply chain, this new factory will be the cornerstone of our automotive industry, backing manufacturers to develop and expand, and customers to make the switch from petrol and diesel,” he said.