Tata will build UK-based 40 GWh battery powerhouse

19 July 2023

The Indian conglomerate, Tata Group, is not one to be left behind in the global EV race and is fueling the global shift away from traditional gasoline vehicles. No longer just the realm of clean-energy idealists and early adopters, EVs are inching toward mainstream acceptance, and this transition requires a lot of batteries. Tata clearly understands the assignment, committing to the construction of a large-scale battery cell factory in Somerset, UK, and transforming the region into a major hub for EV battery production.

Apparently, Tata's decision wasn't just about tossing a dart on the global map of EV battery manufacturers. The choice to locate in Somerset came after an extensive evaluation of several other potential sites, including Spain. Let's just say the Brits won this round, and the Spanish sangria had to be kept on ice. Somerset's gain promises to be a significant boon to the UK's automotive industry, particularly given the ongoing Brexit uncertainties and dwindling investment from other car manufacturers.

The upcoming Somerset facility, owned by Salamanca Group, is expected to house a 40 GWh battery cell factory. To put it into perspective, the new factory could churn out enough battery cells to power approximately half a million EVs each year. So, the question on everyone's lips: Is the UK really ready for the EV revolution?

An extra sprinkling of intrigue comes in the form of Chinese battery manufacturer Envision. Rumors are swirling about a potential partnership with Tata to build and operate the Somerset site. The factory could be one of the biggest investments in the UK's automotive sector since the Brexit vote, and it has already made UK Prime Minister Rishi Sunak break into his happy dance.

Tata's bold move is being incentivized by the British government, which reportedly offered a package worth hundreds of millions of dollars. It's unclear if the full request of $617 million in aid has been granted, but let's just say that the UK isn't shy about showing its appreciation for this massive project.

This venture is quite intriguing, especially considering the recent misfortune of UK battery startup Britishvolt, which stumbled into administration after committing to a similarly ambitious project. The survival of Britishvolt hinged on the UK government delivering on its pledge to support the startup with $123 million. Unfortunately, we know how that story ended. Perhaps the UK learned its lesson and decided to step up its support of EV technology, or perhaps it's back to its usual tricks, and it'll be yet another storm in a cup of tea.

Tata's significant commitment to the UK could signal the dawn of a new era in the country's automotive landscape, one that the UK's automotive industry desperately needs. Politics and business hardly ever mix, and when they do - the outcomes are far from promises. At least Tata has got capital to fall back on in case the government fails to deliver again. Still, the question remains - how can a $617 million cost to a taxpayer represent better value than $123 million? It must be some sort of a weird economic trick again.

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