Government Investment Supports Agratas Battery Factory in Somerset
The Somerset-based battery factory, owned by Tata's Agratas subsidiary and set to supply Jaguar Land Rover (JLR), is receiving a £380 million grant from the UK government as construction continues despite delays.
JLR, the UK's largest automotive employer, will use batteries produced at the site for its electric Range Rover and Jaguar models. Tata Group, an Indian conglomerate, owns both JLR and the Agratas EV battery factory.
Business Secretary Peter Kyle announced the funding on Thursday during a visit to the Bridgwater construction site. The government stated that the gigafactory is expected to employ 4,200 people in the long term.
In 2023, Tata indicated the project would cost £3 billion, with part of the funding coming from the UK government, though the exact amount was previously undisclosed. Progress has been slower than anticipated. Agratas had aimed to begin production by 2026; however, this timeline now appears unlikely following JLR's delay of the electric Range Rover launch last year.
Globally, EV manufacturers have postponed or cancelled new battery model production plans after overestimating the pace at which consumers would transition from petrol vehicles.
Recent geopolitical tensions, including Donald Trump's conflict in Iran, have caused oil prices to rise in recent weeks. This increase may enhance the attractiveness of EVs to consumers and justify the substantial investments automakers must make to shift to electric vehicle production.
Details of the Agratas Gigafactory
The Agratas plant will be the UK's second high-volume battery production facility. It is projected to eventually produce batteries with a capacity of 40 gigawatt hours annually, sufficient for hundreds of thousands of vehicles. The other UK gigafactory is operated by AESC, a Chinese-owned battery manufacturer located in Sunderland, northern England.
Currently, the Somerset site consists mainly of a steel frame, with construction ongoing and a target to start battery production by the end of 2027. Agratas has reduced the physical size of the first of three planned buildings, attributing this to the adoption of more efficient manufacturing processes rather than a reduction in planned output.
JLR had initially planned to launch the electric Range Rover in 2025; however, revealed last year that the launch was delayed to 2024. Although prototypes have been completed for months, the vehicle is not yet available for sale. The urgency to bring the car to market diminished following the UK government's adjustments.
Tata has also received a £500 million government pledge to upgrade its steel production to cleaner electric arc furnaces.
Statements from Officials and Industry Leaders
"The Agratas investment and several others in automotive research announced on Thursday would boost economic growth and our resilience, secure jobs and put more money in people’s pockets," said Business Secretary Peter Kyle.
He added, "In an unstable world, our modern industrial strategy is providing investors the stability and confidence they need to plan not just for the next year, but for the next 10 years and beyond. That is what sets us apart from the rest, and will help ensure advanced manufacturing remains a thriving sector in the UK for decades to come."
Earl Wiggins, vice-president of UK manufacturing operations for Agratas, stated, "We welcome the UK government’s investment as we build a battery manufacturing facility that will play a vital role in delivering net zero and strengthening the UK’s position as a global leader in battery manufacturing.
This funding will support the development of our Somerset facility, enabling us to produce battery cells for our anchor customer, JLR. Over the next year we will have over 2,200 people working on the site, and that growth will continue over the coming years."
Interim Battery Supply and Additional Context
Before the completion of the Agratas factory, JLR will source batteries from AESC. This supply agreement was reportedly terminated last year by Société Générale, an investment bank, although references to JLR were removed from the bank's website following inquiries by .
