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Britain to win race for Jaguar Land Rover gigafactory

Jaguar Land Rover factory - Chris Ratcliffe/Bloomberg
Jaguar Land Rover factory - Chris Ratcliffe/Bloomberg

Britain is set to beat Spain in the race to host Jaguar Land Rover’s gigafactory, handing a significant boost to the UK auto industry.

Tata, the Indian owner of Jaguar, is close to finalising a deal to build an electric vehicle battery manufacturing plant in the UK.

The main aspects of an agreement have been drafted and, though sources warned that no deal has yet been signed, the investment is expected to be unveiled as soon as next week.

Tata's chairman, Natarajan Chandrasekaran, is scheduled to meet the prime minister next week, the BBC reported.

The Indian conglomerate had been assessing both Britain and Spain as a location for a gigafactory. Earlier reports suggested Tata had been leaning towards Spain given cheaper electricity costs.

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Jeremey Hunt, the British Chancellor, offered the business £500m to come to the UK, which was more than the €350m (£300m) subsidy promised by Madrid.

The government declined to comment on Tata’s decision, as did the Indian conglomerate.

News of the planned gigafactory, which is expected to be based in the Gravity business park in Somerset, will be cheered by Britain’s auto industry. Senior figures have warned that car manufacturing in the UK risks falling into terminal decline without significant investment in battery production.

Britishvolt, the country's hope for an independent battery plant, collapsed into administration earlier this year. It left only Nissan, JLR’s biggest competitor in the UK, with a domestic battery supply.

Separately, Kemi Badenoch is seeking a meeting with Elon Musk after the Tesla boss raised the prospect of building its next factory in England.

The Business and Trade Secretary has instructed officials in her department to contact Tesla, the Telegraph understands, following comments made by Mr Musk on Tuesday.

Addressing business executives in London by video link, the entrepreneur said his company would start scouting for a new gigafactory site later this year, adding: “I will strongly consider England.”

A looming 2035 ban on the sale of new petrol and diesel cars means it is increasingly important to have gigafactories in Britain.

FILE - Twitter, now X. Corp, and Tesla CEO Elon Musk poses prior to his talks with French President Emmanuel Macron, May 15, 2023 at the Elysee Palace in Paris. Florida Gov. Ron DeSantis will announce his 2024 presidential campaign in a Twitter Spaces event with Musk on Wednesday, May 24. (AP Photo/Michel Euler, Pool, File) - AP Photo/Michel Euler
FILE - Twitter, now X. Corp, and Tesla CEO Elon Musk poses prior to his talks with French President Emmanuel Macron, May 15, 2023 at the Elysee Palace in Paris. Florida Gov. Ron DeSantis will announce his 2024 presidential campaign in a Twitter Spaces event with Musk on Wednesday, May 24. (AP Photo/Michel Euler, Pool, File) - AP Photo/Michel Euler

The Brexit deal also means that cars built using imported batteries will soon attract a 10pc tariff if exported to Europe.

Stellantis, the car giant behind Fiat and Vauxhall, has warned that its investment in Britain is under threat unless the Brexit deal is renegotiated.

Mr Hunt on Wednesday insisted the issue could be resolved without fresh talks.

He said the so-called Windsor Framework agreed between the UK and the EU in February had “created a different relationship with the EU”.