It has been a long time coming, but there was talk yesterday that the decision by Tata Group to build a gigafactory in Britain may be the moment that saves the nation’s automotive industry.
Details are not fully confirmed and neither No 10 nor Tata, the Indian parent company of Jaguar Land Rover, would formally confirm that the location for the electric car battery manufacturing plant will be on the site of a redeveloped Royal Ordnance factory near Bridgwater in Somerset. Contracts have yet to be signed, sources say, negotiations are continuing and due diligence investigations by Tata have not concluded.
There was no confirmation, either, of how much of the stated £4 billion investment in the project will come from the taxpayer. The mooted figure is up to £500 million, which would be the single biggest taxpayer support of the British carmaking sector in history.
And there is no detail of how that will be broken down. Direct lumps of cash for land purchase and construction, support for training programmes, tax breaks on investment, forgone business rates and subsidised cheap electricity deals for an energy-intensive production process could all come into the mix.
The pressure for this gigafactory to be a success will weigh heavily on Tata and Jaguar Land Rover. When Thierry Bolloré, the former chief executive of the carmaker, made his bold commitment in 2021 that the Jaguar brand would become all-electric from 2025, there was no explanation of where the company would source its batteries.
Advertisement
In April, when Jaguar Land Rover updated this “Reimagine” project, the company said it was putting the building blocks in place and was repurposing — as an electric vehicle sub-assembly facility — its huge 2014 investment in a state-of-the-art diesel engine factory in Wolverhampton. At that point, it was uncertain whether Tata would create a gigafactory in Spain or in Britain.
Even now, with the future commitment to Britain, it seems clear that, as the group accelerates its all-electric Jaguar programme, it will have to find an interim solution and will source its batteries from elsewhere. The plan is for its British gigafactory to be in production from 2026, an ambitious timeline under which full production will not be reached until a few years later.
On almost every metric, the Tata gigafactory plan wins where the failed Britishvolt venture near Blyth in the northeast of England was defeated. It has the big money of Tata behind it, whereas Britishvolt was scuppered as investors fled during Britain’s economic and financial crash last autumn.
It has the unequivocal support of the government, whereas ministers abandoned a £100 million commitment to Britishvolt because of the diminishing likelihood of getting its plant into construction. And it has the big anchor customer in Jaguar Land Rover, whereas Britishvolt had piecemeal understandings with small manufacturers.
However, like Britishvolt, there are question marks over whether Tata’s technology is proven. As it stands, Tata does not make batteries. Only in recent weeks has it set up a subsidiary, Agratas, an entity so new that Tata officials are unable to provide details of its structure, scale, management or technology.
Advertisement
There are those ready to raise the alarm that Tata’s commitment alone does not save the British automotive industry, which last year produced the fewest cars since the 1950s.
Andy Palmer brought the Nissan Leaf electric car to Sunderland. He had plans to electrify Aston Martin Lagonda before losing his job there during its post-float financial crisis and now is involved in several zero-emission projects and companies.
“I air caution and so should the industry,” he said of the Tata news. “If the UK dishes out the bulk of its battery-related support to one brand, then we still face likely car industry Armageddon.”
That may sound churlish, especially as the Tata project — at 40 gigawatts of capacity, on top of Nissan’s plans to boost its gigafactory capacity with Envision, its partner, to 38GW — means that the UK appears to be three quarters of the way in commitments to the estimated 100GW that the country needs to sustain an electric vehicle assembly industry by 2030.
Palmer’s point is that in future there will be others with their hands up for government support, not least when BMW converts its Oxford plant to produce the next generation of all-electric Minis later this decade with the need for hundreds of millions of pounds of taxpayer support.
Advertisement
There may yet be a political fallout. Britishvolt was marketed by Boris Johnson, the former prime minister, as a flagship of his levelling-up policy bringing thousands of jobs to the crumbling red wall, the underinvested regions of post-industrial Britain. A gigafactory in the southwest would be in the Tory shire heartlands. It has not gone unnoticed that the announcement was hurried out the day before the Somerton and Frome by-election in the next-door parliamentary constituency to the Bridgwater site.
Yet the mood in the automotive industry generally was one of celebration yesterday, if not quite one of “job done”. The hard work now starts in training thousands of workers, sourcing the materials being sucked up by China, Europe and the United States and building a supply chain.
Graham Hoare, the former chairman of Ford of Britain and an executive recruited in an attempt to shore up the Britishvolt project, is chief executive of the country’s Manufacturing Technology Centre in the West Midlands. He said: “The news is a significant boost to the UK economy. It provides much-needed confidence to the supply chain, secures a pipeline for thousands of high-skilled jobs and is an important step on our net-zero journey.
“The UK is in urgent need of gigafactories if it is to retain a home- grown automotive industry in the era of electric motoring. This news sends a powerful message that the UK is committed to growing its battery capability.”
