Tata demands £500m from UK to build battery factory
The government will have to cough up £500m in taxpayer funds if it wants Jaguar Land Rover owner Tata Motors to build a new battery factory in Britain.
The Indian car giant is close to choosing between Spain and the UK for its new plant and has given ministers just weeks to make a decision, according to the Financial Times.
The £500m in public funds would include grants, assistance for energy costs and research funding.
Tata’s demands reflect the challenge the government faces over how much support to give the industry, as the UK scrambles to make the transition from petrol and diesel cars to mass-market electric vehicles.
JLR is the largest employer in the UK car manufacturing sector, and it would be a huge blow for the UK’s burgeoning battery ambitions if it opted against sourcing batteries in the country.
The industry is still recovering from the collapse and resale of Britishvolt to Aussie group Recharge, which has scrapped plans to produce hundreds of thousands of lithium-ion batteries every year for mainstream motor vehicles, and will instead use the plant to develop clean energy storage and batteries for luxury, high-end sports cars.
Tata is weighing up a partnership with Chinese battery maker Envision – which would involve the Asian group building and running a factory in Somerset to supply JLR’s new range of electric cars.
Despite new investments by Nissan, Stellantis and Ford in electric vehicle technology, the UK has struggled to attract big battery companies to set up factories.
UK car production dwindled last year to its lowest level since the 1950s, following the closure of Honda’s plant in Swindon.
Downing Street has set aside £850m to attract battery makers to the UK, with ministers providing more than £100m to Nissan for electric investment at its factory in Sunderland.
Stellantis received about £30m from the government to make electric vans in Ellesmere Port.
Britishvolt had been offered £100m of state funding before its collapse this year.