Jaguar Land Rover is looking for £500m (about $602m) from the British government to build a battery factory in the UK to further their electric vehicle ambitions -- with the threat of building it in Spain if the government doesn't support the plan.
Jaguar Land Rover is looking for £500m (about $602m) from the British government to build a battery factory in the UK to further their electric vehicle ambitions -- with the threat of building it in Spain if the government doesn't support the plan.
Tata, the conglomerate that owns Land Rover, has asked for money from the government to build a factory in Somerset, in the southwest of England. With the battery-powered vehicle industry taking off, countries across Europe are shelling out big subsidies to try to get a piece of the pie, which could re-align where major automotive components are made. Spain is going heavy on building a battery industry via subsidies, with the hopes that their abundant sunny weather will attract companies that want to build green energy components with green solar energy.
To a degree, the decision by the government on underwriting the British battery factory is being taken as a statement of their interest in supporting the British auto industry in the long term. JLR is now Britain's largest automaker, and the perception of their long-term confidence in the UK and manufacturing there somewhat hinges on this battery factory and where it's built. As Britain works through the economic aftershocks of Brexit, the factory would help build an independent and home-grown auto industry further.
Spain does offer cheaper labor than the UK, but as JLR would still presumably retain its extensive British manufacturing network, the costs would likely be countered by shipping the batteries by sea or road hundreds of miles. It is also tied to separate negotiations that Tata's steelmaking division is having with the government regarding green retrofits to a steel mill.
The British government has a billion pounds set aside for transitioning the nation's auto industry from internal combustion to electric, and this proposal by JLR has become somewhat controversial in the British press in part for utilizing such a large part of it. While other automakers intend to ship batteries from elsewhere to their UK manufacturing facilities, JLR's scale of manufacturing and prestige as the country's only "local" mainstream automaker makes the potential Somerset factory a partial political statement.
The direction of this project is to be tied up in and determined as part of a string of chaos and controversy in British politics. But as JLR looks to create a large-scale lineup of EVs, including making an EV-only Jaguar lineup by 2025, the decision has to be made soon and will have a major impact both on JLR's supply chain and the British auto industry as a whole.
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