The Indian owner of Jaguar Land Rover is threatening to shift electric car production to Slovakia if ministers refuse to offer taxpayer support for a UK gigafactory.
Tata Motors has held talks with the foreign battery makers Northvolt and SVolt Energy Technology amid a deadlock over state backing for a plant in the UK, which is key to its plans to go all-electric by 2025.
The company has previously announced that new electric models will be built at existing factories in the Midlands, and is understood to be in advanced negotiations about building a gigafactory in either near Bristol or Redcar.
Many of JLR’s 30,000 UK jobs could be at risk if it opts for Slovakia instead.
Government sources suggested that the proposals were a negotiating tactic. An insider said: “They are using this as a way to extract more money from the Government.”
Tata has been in talks with ministers for several months as it finalises its decision for a new plant to supply JLR’s electric vehicle fleet, whittling site locations to a shortlist of two.
The Daily Telegraph can disclose that Gravity business park near Bristol – the location that the UK hoped to convince Jeff Bezos-backed electric truckmaker Rivian to base a £1bn factory – will compete against the Teesworks site in Redcar.
A final decision is due by the end of June, industry sources said.
A spokesman for JLR said: “With our strategy for every single Jaguar Land Rover model available as a full [battery electric vehicle] by the end of the decade, we continue to explore all options around the supply of batteries. No decisions have been made yet.”
The threats by Tata will draw parallels with Nissan’s tough bargaining with the Government at the end of 2016. The Japanese carmaker managed to secure £80m in taxpayer aid in return for committing to Britain’s biggest car plant in Sunderland, four months after the Brexit vote.
Boris Johnson promised to build a new motorway junction and revive old rail links to woo Rivian to the 635-acre Gravity business park.
At the time, the Prime Minister said: “The UK’s innovation scene is thriving due to the steps my Government has taken to invest in the electrification of the automotive sector underpinned by my personal commitment to the industry.”