India-headquartered automotive company Tata Motors has sought more than £500 million in aid from the UK government, for setting up a battery factory in the country, a report in the Financial Times said.
The factory, which Tata Motors is reportedly considering setting up in Somerset in partnership with Chinese battery maker Envision, will be critical in supporting the manufacturing of Jaguar Land Rover's fleet of electric vehicles.
A UK government official, who spoke to FT on condition of anonymity, said the discussions with Tata Motors were underway. "Whether or not the talks go anywhere depends on whether a final amount can be agreed," the official was quoted as saying.
The newspaper learnt from sources that Tata Motors has given "weeks" to the UK officials to pledge financial support. The company, which owns JLR, is weighing the option of setting up the plant in Spain, if the talks with the British government fail to yield results, the persons aware of the development claimed.
Spain, which is emerging as UK's rival in Europe in the EV segment, has already received commitments for setting up battery factories from German automobile giant Volkswagen and startup Inobat.
The decision to be taken by Tata Motors will be "pivotal", and if it opts for Spain, "it would send a seismic signal internationally", a person privy to the matter told FT.
There was no official reaction from Tata Motors' spokesperson in response to the news, at the time of writing this report.
Moneycontrol could not independently verify the development.
Tata Motors' battery plant in Somerset, which is in the plans, is crucial for the country's struggling automobile sector. Car production in the UK had in 2022 dropped to its lowest in the past seven decades, as Honda had downed the shutters of its plant in Swindon.
The UK government has reportedly allocated £850 million to draw battery manufacturers to the country. The amount, which is to be used as aid and incentives, is aimed at attracting investors.
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