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The Jaguar Land Rover EV battery factory in Somerset UK

19 July, 2023

The Jaguar Land Rover EV battery factory in Somerset UK

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The Indian Tata Group, owner of Jaguar Land Rover, has unveiled plans to invest £4 billion in the construction of a new electric car battery gigafactory in the United Kingdom.

The factory is expected to be located in Somerset, creating approximately 4,000 new jobs in the region. Once operational in 2026, it will become one of Europe’s largest battery cell manufacturing sites.

The negotiations

Negotiations between Tata and the UK government have been ongoing for nine months to secure state aid for the project. While specific details regarding subsidies remain confidential due to commercial sensitivities, reports suggest that they are worth hundreds of millions of pounds, potentially reaching £500 million. The UK government’s support is seen as crucial in securing the investment, with Tata initially considering a site in Spain for the plant.

According to reports, the Spanish Government proposed a subsidy of €350 million (£304 million) to Tata, which is the maximum amount it is currently able to offer for battery plant financing due to a set limit of €350 million in the Spanish legislation.

The UK Government, while not acknowledging the previously mentioned figure of £500 million in state subsidies, has acknowledged that the potential agreement involves funding in the hundreds of millions of pounds. These subsidies are expected to be provided in the form of cash grants, energy subsidies, and other support for training and research.

Why is this a big deal for the UK?

In Europe, cell manufacturers are planning to produce up to 1 terawatt-hour (TWh) of cell capacity in this decade. However, about 43% of this production capacity comes from non-European companies, mostly from Asian manufacturers, with Chinese and  Korean companies leading the way. This means that, in the short and medium term, non-European cell manufacturers will continue to dominate local cell production. It will be only after 2025 that European cell manufacturers will start catching up with their non-European counterparts.

Announced battery cell production capacities 2030 from EU manufacturers - Credit to The Fraunhofer Institute for Systems and Innovation Research ISI

Announced battery cell production capacities 2030 from EU manufacturers – Credit to The Fraunhofer Institute for Systems and Innovation Research ISI

A huge advantage of Asian companies is their demonstrated ability to build large factories quickly. For example, CALB in China constructed a 50 GWh factory in just over a year. Established Asian cell manufacturers have a higher likelihood of realizing their plans compared to European startups, especially when it comes to scaling up production rapidly.

The problem is that, although the EU has already 35 factories either operating on about to start, the UK is left behind with only one active factory. Experts in the industry have emphasized that multiple battery factories will be necessary to support the future of UK car manufacturing as the gradual phase-out of traditional petrol and diesel engines occurs over the next decade.

These possible developments highlight the importance of monitoring the establishment of production capacities in the battery industry. Achieving economic sovereignty in the battery value chain requires successful implementation of European plans. This would create opportunities for upstream value creation, such as component and material production or machine and plant construction, within the growing battery industry in Europe.

Is this the first electric vehicle battery factory in the UK?

No it isn’t. European startups have existed in the past but faced challenges. Britishvolt, a UK battery start-up, entered administration in January 2023, resulting in the immediate redundancy of the majority of its 232 employees. The company had ambitious plans to construct a large-scale factory in Blyth, Northumberland, dedicated to manufacturing electric car batteries. The government had viewed this as an opportunity for regional economic growth and a means of supporting the future of car manufacturing in the UK. Regrettably, Britishvolt faced financial challenges and was unable to generate profits, leading to a depletion of funds. Following a careful assessment of available options, the company’s board concluded that there were no viable bids to sustain the business.

The envisioned £3.8 billion factory in Blyth was part of a broader strategy to bolster UK manufacturing capabilities in electric vehicle batteries and create approximately 3,000 highly skilled jobs. Currently, the UK possesses only one battery plant, which is Chinese-owned (Nissan) and is located Sunderland.

How big is it going to be?

The gigafactory aims to produce 40 gigawatt hours (GWh) of batteries a year. To understand the size, an average electric car usually carries a 65-85kWh battery, so the aimed production will be able to easily supply hundreds of thousands of electric vehicles with batteries for many years to come. Furthermore, this could assist in the adoption of large size electric vehicles such as vans, lorries etc. The factory is poised to play a vital role in attracting investment and generating new jobs in the battery supply chain. This development is crucial for the UK as it phases out the production of petrol and diesel vehicles in preparation for the ban on new fossil fuel cars by 2035. The Society of Motor Manufacturers and Traders (SMMT) hailed the investment as a significant moment for the UK automotive industry, emphasizing the need to produce batteries domestically to secure long-term vehicle production in the country.

Grant Shapps, the energy security secretary, hailed the investment as the largest in the UK automotive sector in four decades and a vote of confidence in the British economy. He also highlighted the potential for the factory to produce around 50% of the electric vehicle batteries required in the UK by 2030, emphasizing its significance for the country’s transition to electric mobility.

Where exactly is the factory going to be built?

The chosen location is at the 616-acre Gravity Business Park near Bridgwater in Somerset, UK.

Why was this location chosen?

Several factors contributed to this decision. Look at the map below:

Jaguar Land Rover EV battery factory in Somerset UK - Map Location

Jaguar Land Rover EV battery factory in Somerset UK – Map Location

The Gravity Business Park is an old Royal Ordnance factory, and it is located 1.5 miles off junction 23 of the M5 Motorway. There is also an existing railway line nearby, with plans for passenger and freight terminals to be built to serve the gigafactory. Furthermore, the whole site is only 29 miles from the Bristol Port.

For the UK, it is crucial to closely monitor the progress of establishing production capacities within the battery industry. The creation of this gigafactory will unlock possibilities for creating upstream value, including component and material production, as well as machine and plant construction. The UK can become a leading player in the thriving battery industry in Europe.