LONDON/GAYDON, England (Reuters): India’s Tata Group will build an electric vehicle battery plant in Britain to supply its Jaguar Land Rover factories, delivering a major boost for the UK car industry in need of domestic battery production to help secure its future.

The announcement marks Britain’s biggest move in the car gigafactory space as it seeks to keep up with the United States and European Union in the race to develop green industries.

Tata said on Wednesday it would build its first gigafactory outside of India in Britain with an investment of 4 billion pounds ($5.2 billion), creating up to 4,000 jobs and producing an initial output of 40 gigawatt hours.

Prime Minister Rishi Sunak’s government declined to outline the financial support it had promised Tata to fend off Spain, which had also lobbied to win the project.

During a visit to a JLR facility on Wednesday, Sunak said the investment was a “fantastic vote of confidence” in Britain’s economy, adding that the UK had provided targeted investment.

“We’re actually well on our way to providing the EV capacity that the country needs,” he said.

Energy minister Grant Shapps told the BBC that the support package was “large” but would not directly reach 1 billion pounds, adding that details of the deal would follow later due to commercial sensitivities.

Britain has lagged European rivals in building electric vehicle (EV) battery gigafactories, with more than 30 planned or under construction across the EU. Britain currently has one small Nissan plant and another in the works.

The new plant is expected to be built in Somerset, south-west England, while Jaguar Land Rover’s UK factories are near Birmingham, in central England, reflecting the need for heavy batteries to be built near their car plants.

Production is due to start in 2026 to supply JLR’s future battery electric models, including the Range Rover, Defender, Discovery and Jaguar brands.

With an initial output of 40 gigawatt hours, Britain said the factory would provide almost half of the battery production it needed by 2030. The Faraday Institution predicts Britain will need more than 100 GWh a year by that time.

The announcement comes with Britain at a critical stage in free trade talks with India, and Tata Sons Chairman N Chandrasekaran said the plan strengthened the company’s commitment to the UK and thanked the government for working “so closely with us to enable this investment.”

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