Tesla and JLR look to UK for new gigafactories

The UK could benefit from the building of two giant electric car battery plants – so-called gigafactories – as Tesla and Jaguar Land Rover (JLR) develop future production plans.

Tata, JLR’s owner, is expected to announce next week that it has chosen a site off the M5 in Bridgewater, Somerset, to host the electric vehicle (EV) battery plant.   

It will be a welcome boost the UK car industry after Britishvolt, the firm behind a plan to build a £3.8 billion gigafactory in Blyth, entered administration at the start of the year when it ran out of cash. 

It also follows a warning from Stellantis that its commitment to build EVs in the UK was at risk, unless Brexit trade rules were re-negotiated. 

The carmaker, which owns 16 car brands, including Vauxhall, wants to avoid having to pay potential tariffs with post Brexit rules stipulating that at least 40% of the content of EVs and 30% of batteries must originate from the EU or the UK.

Muthu Krishna, battery metals analyst at Fastmarkets, said: “It is a crucial victory for the UK automotive industry at a time when Chinese EV brands will be entering western markets and Stellantis’s warning on EU trade tariffs.

“JLR and the UK’s academic institutions are pioneering EV R&D, and a local gigafactory will help keep the UK competitive. But this is the first step of many – the UK government now needs to win more investment and work to establish a sustainable battery raw material supply chain to ensure the UK doesn’t get left behind.”

Rob Jolly, CEO and co-founder of electric car subscription service Onto, believes that JLR’s plans put the UK firmly back “front and centre on the world stage” and pushes aside the current criticisms on Government support. 

“The UK needs to invest in businesses at all stages of the supply chain and it would be fantastic to see this battery plant built on Somerset soil, creating thousands of jobs and maintaining the UK’s highly skilled industry workforce,” he added.

“We know that there is huge demand for EVs in the UK, our electric car subscription service grew by 300% in 2022, and we hope that this investment will pave the way for EV businesses in the future.”

Elon Musk considers UK battery plant

Elon Musk, the boss of Tesla, has said his company will “strongly consider” building a gigafactory in England.

Musk told The Wall Street Journal’s CEO Council that while Tesla is “not currently looking at new locations” for a new factory, the company “will probably towards the end of this year”.

Tesla already has five gigafactories operating in the USA, China and Germany.

Tim Lake, partner, corporate and UK head of industrials at DLA Piper, said: “The reports of Tesla looking to Britain for its next gigafactory is welcome news.

“With the country’s strong industrial and automotive background, should Britain be chosen, it will not only boost the economy, create jobs, and upskill professionals; but will also provide Tesla with world-class talent and access to some of the world’s leading R&D and EV firms based in England.

“Any EV investment in the UK will not only support the country’s move to adopting cleaner vehicles, but will help to position the country as a key leader and enabler for further growth, aiding the reduction of greenhouse gases and helping the country meet its emissions targets.”