The aid package demanded by Tata includes "grants and support packages such as assistance for energy costs and research funding." The new EV factory is set to be built in Somerset, and if Tata's ultimatum is not met, the company is considering partnering with Chinese battery manufacturer Envision to build and run the factory in Spain to supply JLR's upcoming new EVs. Both JLR and Tata declined to comment on the negotiations.
JLR is the largest employer in the UK's auto manufacturing industry and only recently returned to profit. Losing the new battery factory would result in the loss of thousands of new and existing jobs.
According to the Financial Times, not getting the new battery factory would result in significant long-term damage for the UK's auto industry and its international investor appeal. "We are engaging with them - whether or not the talks go anywhere depends on whether a final amount can be agreed," said one unnamed UK government official. "This is a very difficult time for the government."
Compared to other countries in Europe and North America, the UK has struggled to attract significant investments from automakers as they pursue EV battery technologies. Auto production in the country dropped to its lowest level since the 1950s last year following the closure of the Honda factory in Swindon, which previously built the Civic hatchback and Type R.
Tata's ultimatum presents a challenge for the UK government, which might have no choice but to cut a deal due to the potential loss of jobs and investment. Losing Tata would send a strong signal to other deep-pocketed corporations that the UK is not a good place to do business. "Chances are, the UK government will succumb to Tata's demands because it can't afford not to," said an expert.
Tata is aware of the UK's difficulties transitioning from combustion-engined vehicles to EVs, and the company's partnership with Envision would help it achieve its goal of supplying JLR's upcoming new EVs. An all-electric Land Rover Defender is set to arrive in 2025, and a complete lineup of fully electrified Jaguars will follow later the same year.
Source: Financial Times
