Tata Expands Its Steel-To-Software Presence In UK With £4 Billion Gigafactory
The Tata Gigafactory deal is seen as a big win for Britain’s once-famed but now-struggling automotive industry.
India’s Tata Group plans to build a £4 billion gigafactory in the UK to manufacture electric car batteries, expanding its steel-to-software presence in that country.
Tata Motors Ltd. and its U.K. subsidiary, Jaguar Land Rover Automotive Plc., will be the anchor customers for the 40 GW car battery plant that aims to start production in 2026, the salt-to-software conglomerate said in a statement on Wednesday. The investment, which will create 4,000 direct jobs and thousands more in the supply chain, can supply battery cells to roughly half a million vehicles per year, according to a Bloomberg report. A site in Somerset has been chosen for the plant.
The move will help JLR accelerate its shift to electric vehicles. The carmaker is planning to invest £15 billion over the next five years in developing electric cars as well as autonomous-driving features.
The proposed Tata Gigafactory builds on the already expansive presence that the Indian salt-to-software conglomerate has in the United Kingdom.
Tata Steel Ltd.’s British operations had an annual turnover of over $2 billion from sales of more than three million tonnes of the alloy produced at the company’s Port Talbot and South Wales blast furnaces. The company employs 8,000 people.
Tata Tetley, born after Tata Sons Chairman Ratan Tata acquired the legendary British brand in the 2000s, is the biggest beverage brand in the U.K. with a 27% market share.
In 2008, Tata Motors acquired Jaguar Cars Ltd. and Land Rover from Ford Motor Co. to set up JLR in the U.K. The quintessentially British carmaker, though often a drain on Tata Motors’ revenue, is the crown jewel of the company.
Tata Consultancy Services Ltd. is the top supplier of software and IT services in the UK, with five of the top six global investment banks as its clients. Eight of the Top 10 retailers in the U.K. are TCS clients.
"Our multi-billion-pound investment will bring state-of-the-art technology to the UK, helping to power the automotive sector’s transition to electric mobility, anchored by our own business, JLR," Natarajan Chandrasekaran, chairman of Tata Sons Pvt. Ltd., said in the statement. "With this strategic investment, the Tata Group further strengthens its commitment to the U.K., alongside our many companies operating here across technology, consumer, hospitality, steel, chemicals, and automotive."
What The U.K. Gets
The investment "is testament to the strength of our car manufacturing industry and its skilled workers," Prime Minister Rishi Sunak said in a statement on Wednesday.
The timing could be helpful for Sunak, whose Conservative Party is struggling in the polls and facing a series of tough by-elections, including three on Thursday. One of the elections in which the Conservatives risk losing parliamentary seats is in Somerton and Frome—a mere 30 minutes from where the Tata Gigafactory is due to be built.
The U.K.’s car manufacturing sector, once a core part of the economy, has been struggling to cope with Brexit and the shift to electric vehicles.
This investment will be crucial to boosting the U.K.’s battery manufacturing capacity needed to support the electric vehicle industry in the long term. With an initial output of 40 GWh, it will also provide almost half of the car battery production that the Faraday Institution estimates the U.K. will need by 2030.
