India-based giant Tata announced Wednesday that it will build a £4 billion ($5.2 billion) battery factory in the west of England, a commitment sought by the car industry and lawmakers hoping to quell fears of carmakers’ exodus from Britain. . .
Tata owns Jaguar Land Rover, the British-based automaker, and the company’s factories in Britain will be important customers for the batteries. The government said the plant, which will create 4,000 jobs, could eventually produce nearly half of the electric car batteries Britain needs by 2030.
The announcement was made thanks to a slew of subsidies provided by Prime Minister Rishi Sunak’s government. It came as fears have grown in recent weeks that Britain’s car industry could deteriorate due to a continued shift to electric cars, coupled with the country’s exit from the European Union, the main export market for British-made cars.
Having a large domestic maker of batteries means that automakers will not import them and will face exorbitant EU duties or high costs of transporting equipment. Until now, the only other battery facility in Britain was linked to the country’s largest car plant, operated by Nissan in the North East of England.
It was recently reported that Tata was considering building its battery plant in Spain, but such a move would have put British-made Jaguar Land Rovers at a disadvantage. The site eventually chosen was likely in Somerset, West England.
Mr Sunak came up with an offer that would allay fears of losing out to one of the country’s biggest automakers. Grant Shapps, Britain’s energy security secretary, told the BBC the deal was “hard-won”. He refused to disclose the amount of aid and subsidies provided by Tata; The government said it would release these details “in due course”.
In a press release from the British government, Natarajan Chandrasekaran, chairman of Tata, said he wanted to “thank His Majesty’s Government, who have worked closely with us to enable this investment”.
Last year, Jaguar Land Rover produced nearly 203,000 cars in Britain, according to figures from the Association of Motor Manufacturers and Dealers, making it the country’s second largest carmaker after Nissan. Overall, the number of cars produced in Britain fell sharply to 775,000 last year from a peak of more than 1.7 million in 2016.
In the race for battery manufacturers to subsidize carmakers, Britain is competing with the United States, which provides large subsidies to battery manufacturers, and the European Union.
While car manufacturing in Britain has been in decline since 2016, coinciding with the vote to leave the European Union, it remains important to the economy, which employs 182,000 people, according to the Association of Motor Manufacturers and Traders. Eight out of 10 cars made in Britain are exported, and nearly 60 percent of that goes to the European Union.
Tata is already investing heavily in several businesses in Britain. Besides Jaguar Land Rover, the company also has large steel operations, including a large plant in Wales. The company has been talking with the government about financial aid to transform the plant’s operations to produce steel with lower carbon emissions.
In his statement, Mr Chandrasekaran said Tata’s decision to invest in the battery factory “reinforces its commitment to the UK”.