Jaguar Land Rover’s Somerset gigafactory lands £380m in government’s £700m EV investment drive

Britain’s electric vehicle ambitions have been given a substantial shot in the arm, with the government committing £700 million in grants and support to accelerate zero-emission vehicle manufacturing across the country.

The headline beneficiary is Jaguar Land Rover, whose under-construction Somerset gigafactory will receive £380 million of taxpayer backing.

Business Secretary Peter Kyle unveiled the package on a visit to the Bridgwater site, framing the investment as a cornerstone of the government’s modern industrial strategy. Speaking at the construction site, Kyle said the funding was designed to deliver the long-term stability that global investors increasingly demand.

“In an unstable world, our modern industrial strategy is providing investors with the stability and confidence they need to plan not just for the next year but for the next ten years and beyond,” he said, adding that the commitment would help keep advanced manufacturing “a thriving sector in the UK for decades to come”.

The Bridgwater gigafactory is being developed by Agratas, the battery manufacturing arm of India’s Tata Group, which also owns JLR. Once operational, the plant will supply cells for future electric Range Rovers and Jaguars built at JLR’s West Midlands assembly lines, with the first British-made batteries expected to roll off the line in 2028. The first electric Jaguars, due next year, will initially rely on batteries produced at Agratas’s existing facility in Gujarat.

JLR has pledged to end production of internal combustion-engined vehicles by 2036, making the Somerset plant a critical piece of its electrification jigsaw. Once complete, Bridgwater will become only Britain’s second large-scale gigafactory, joining Nissan’s established operation in Sunderland, which already produces cells for the Leaf and is gearing up to supply electrified Juke and Qashqai models.

Of the remaining £320 million, JLR and Nissan, the UK’s two largest automotive employers, will share £90 million to fund joint research and development aimed at driving down the cost of future EV production. A further £100 million has been ring-fenced for companies in the West Midlands and North East to retool factories and train workers for the emerging EV supply chain, while £47 million will back smaller battery innovation projects.

Additional funding will help smaller firms adopt digital technologies, artificial intelligence and robotics, alongside skills training programmes in sixth forms and higher education. All of the announcements sit under the government’s Drive35 strategy, launched last year with the goal of decarbonising the UK’s automotive industry within a decade. Ministers claim the programme will create 50,000 jobs and unlock £7.5 billion in private investment.

Smaller innovators also feature prominently in the funding round. Winners include HyProMag of Birmingham, which produces rare-earth magnets for EV motors; Coventry-based electric motorbike maker Maeving; and Oxfordshire’s Elm Mobility, which builds last-mile delivery vehicles. Cotswolds-based McMurtry Automotive, maker of the £1 million Spéirling electric hypercar, is also on the list, as is Surface Transforms, the Liverpool-based carbon-ceramic brake disc specialist, which was recently delisted from AIM after entering administration. A Whitehall source noted that Surface Transforms had “been successful in the application process but has not yet undergone the financial checks and due diligence required to receive the funding”.

In a notable departure from traditional grant-making, the government will also take a 10 per cent stake in listed hydrogen company ITM Power, comprising a £40 million equity injection and a £46.5 million grant to advance electrolyser technology.

The investment announcement comes as the Society of Motor Manufacturers and Traders reported new car sales hitting a seven-year high, with March registrations up 6.6 per cent, the strongest showing since 2019. That resurgent demand underpins the case for committing capital to domestic battery production at a moment when global rivals are pouring money into their own supply chains.

Kyle argued that policy certainty has become “a competitive advantage” in an industry buffeted by geopolitical instability, the Iran crisis, fragile supply chains and rising energy costs. Through Drive35, the government has pledged £4 billion to the automotive sector through to 2035, the largest long-term commitment the industry has seen since the post-war era, alongside trade policies designed to ease tariffs during the EV transition.

The Somerset gigafactory alone is expected to create 4,000 jobs and will include a “smart campus” for workers. Built using British steel, it is being positioned as the anchor of a domestic battery supply chain intended to reduce Britain’s reliance on imported cells, complementing existing investments in Sunderland, Coventry and Bolton.

For an industry watching nervously as competitors in Europe, North America and Asia chase the same pool of EV capital, the government’s message is clear: Britain is open for business, and it is prepared to write sizeable cheques to prove it.