Tata to pick the UK over Spain for new battery plant
Jaguar Land Rover owner Tata Motors appears to have opted for the UK to construct its planned battery cell factory. Previous plans for Europe saw Tata also eyeing Spain, yet the latest BBC reports consider talks in Britain well advanced, including a location.
The BBC expects Tata and the UK government to finalise the deal, with reports seeing Tata Chairman Natarajan Chandrasekaran flying to London next week to meet Prime Minister Rishi Sunak.
The broadcasting corporation quotes sources close to the matter saying that although the deal has yet to be signed, engagement has moved from negotiations to drafting and choreography of how the landmark agreement will be presented.
The latter is essential since Tata was also considering a site in Spain, and the expected decision to choose the UK will be presented as a significant achievement for the British government, particularly in light of recent critique for lacking an industrial strategy and falling behind the US and EU in attracting investment. Last week, Stellantis warned it might close UK factories if the government does not renegotiate the Brexit deal. The firm had committed to making electric cars and vans in the UK but already told the BBC this was under threat.
As for Tata, the BBC quotes industry insiders who have described the plant as the most significant investment in UK automotive since Nissan came to Britain in the 1980s.
The battery cell factory of the Indian automotive company will be built in the Gravity Business Park in Bridgwater, located in the southwestern county of Somerset in England, creating up to 9,000 jobs.
The decision won’t come cheap. While the government has said it does not recognise a figure of £500m in reported subsidies, they concede that it is in the hundreds of millions of pounds. In addition, approximately £300 mn will be allocated for Tata Motors’ investments in the UK, including the Port Talbot plant for steel, as well as additional energy discounts. The total incentive package for Tata is expected to amount to nearly £800 mn, according to the BBC, equivalent to approximately €920 mn.
Tata’s European factory is set to produce cells for its subsidiary, Jaguar Land Rover, in the future.
Industry insiders talking to the BBC hope that the Tata investment will open the door to further battery investments in the UK, which only has one plant in operation next to Nissan’s Sunderland factory and one barely on the drawing board in Northumberland.
By contrast, the EU has 35 plants open, under construction or planned.
PB Balaji, the Chief Financial Officer of Tata, also mentioned in mid-January, on the sidelines of the Indian Auto Expo in Greater Noida, that localising cell production is critical to increasing the proportion of local components in electric vehicles and will help develop the local supply chain. The manufacturer also plans a battery cell factory in India but has not provided much detail.