India’s Tata Group announced on Wednesday plans to build an electric vehicle (EV) battery plant in Britain with an investment of 4 billion pounds ($5.2 billion).
This will be Tata’s first gigafactory outside of India and will have the capability to produce an initial output of 40 gigawatt hours.
The investment is being seen as a shot in the arm for Britain’s auto industry, with the country lagging behind its European rivals in building EV battery plants.
The BBC said the UK’s Rishi Sunak-government would provide subsidies worth hundreds of millions of pounds to Tata for the EV battery plant.
Prime Minister Sunak, meanwhile, declined to say how much financial support was promised to Tata in order to secure the investment and fend off Spain, which had also lobbied to win the project.
“Tata Group’s multi-billion-pound investment in a new battery factory in the UK is testament to the strength of our car manufacturing industry and its skilled workers,” Sunak said in the statement.
Tata is likely to build the new plant in Somerset, south-west England, while Jaguar Land Rover’s UK factories are based near Birmingham, central England.
Production at the factory, which is set to supply JLR’s future battery electric models, including the Range Rover, Defender, Discovery and Jaguar brands, is due to start in 2026, the British government said.
Britain said the factory would provide almost half of the battery production needed at home by 2030. Domestic production is vital for automakers which rely on heavy batteries being built near their car plants.
The Faraday Institution has projected UK battery demand to reach over 100 GWh a year by that time.
“With this strategic investment, the Tata Group further strengthens its commitment to the UK,” Tata Sons Chairman N Chandrasekaran said in the statement.
Tata Motors’ Mumbai-listed shares rose nearly 2% on the news, outshining the broader index in India which was up 0.1%.
- Reuters, with additional editing by Vishakha Saxena