Jaguar Land Rover owner Tata Group reportedly plans to erect a multibillion-pound electric vehicle battery production plant in Britain. Earlier Spain was being considered to be the other contender.
Tata CEO will visit London next week to meet Prime Minister Rishi Sunak as the company aims to finalize the deal, BBC reports citing sources familiar with the matter.
Deal progress
The deal between the Indian company and the UK government is yet to be inked. Nonetheless, their negotiations have already progressed to drafting and planning for the landmark agreement presentation, sources familiar with the matter disclosed.
The report also noted that the investment could potentially generate up to 9,000 new jobs at the Bridgwater location near the M5.
It is worth noting that Tata is also eyeing another prospective site in Spain, implying that the company’s expected move to pursue Somerset will be the UK government’s major win.
What’s the big deal?
The UK government lacks a comprehensive industrial strategy, which delays its progress in attracting investments compared to the US and the EU.
Stellantis, which owns numerous brands, including Peugeot, Citroen, Vauxhall, and Fiat, pledged to produce EVs in the UK. However, it recently threatened the government about closing its UK factories if the latter failed to renegotiate the Brexit deal.
Finally, it seems the government has recognized the immediate need for a domestic EV battery factory to secure the auto industry’s future.
What would the UK government offer Tata?
The government has stated that while it does not acknowledge the alleged subsidy amount of £500 million for Tata’s battery factory, it does acknowledge that it is in the hundreds of millions of pounds. It would come in various forms, such as energy subsidies, cash grants, and other training and research funding.
The government will also provide about £300 million to subsidize, modernize, and decarbonize possible operations at the Port Talbot factory in South Wales, one of Tata’s extensive steel-related interests in the UK.
In addition, it will also offer Tata energy discounts, bringing the total incentive package near £800m.
BBC sources claim these two projects are connected, even if they were not announced simultaneously.
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The UK pitch is said to have benefited from the Somerset site’s access to power, the experienced workforce in the UK auto industry, and the British legacy of Jaguar Land Rover’s brands.
Hopefully, Tata’s battery factory investment could encourage more investments in the UK. The lack of a domestic battery industry would also put British cars at risk of tariffs under post-Brexit regulations, which are set to take effect next year.
