Jaguar Land Rover owner Tata will announce plans to build its flagship electric car battery plant in the UK.

People familiar with the matter said the new Somerset plant would be officially announced on Wednesday.

The government provides grants worth hundreds of millions of pounds, sources said.

Some in the car industry have described the plant as the biggest investment in British motoring since Nissan arrived in Britain in the 1980s.

The investment could create up to 9,000 jobs around Bridgwater in Somerset. But its significance lies in the boost it will give to the auto manufacturing industry as it transitions from petrol and diesel to manufacturing electric vehicles.

Batteries typically represent more than half the value of an electric vehicle. A reliable supply should therefore be vital for the future of the UK automotive industry.

The government has been criticized for lacking a clear industrial strategy and lagging behind the US and EU in attracting investment in low-carbon technologies.

Some industry insiders hope Tata’s battery investment will open the door for further battery investment in the UK.

The UK currently has just one operating plant next to Nissan’s Sunderland plant, and barely one on the drawing board in Northumberland.

Another proposed battery maker in the North East of England, Britishvolt, went into operation earlier this year.

In contrast, the EU has 35 factories open, under construction or planned.

The government has set out a series of net zero targets, including a ban on the sale of new petrol and diesel cars from 2030. However, its latest five-year program has been criticized for failing to provide the money and the legislation needed to achieve these goals. .

The UK also exports a large number of cars and its overseas markets have embarked on the transition to electric vehicles.

The new Somerset plant will initially supply batteries for a new range of Jaguar and Land Rover electric models.

Tata Group, an Indian multinational, considered a competing site in Spain for the battery factory. His decision to choose the UK will likely be seen as a big win for Britain by the government.

However, sources have indicated that a significant level of subsidy has been provided, which will likely take the form of cash grants, energy cost rebates, and funding for training and research. The size of the incentive program was not disclosed.

As well as owning Jaguar Land Rover, Tata has extensive steel interests in the UK, including the Port Talbot plant in South Wales, and the government is also expected to offer around £300m to subsidize, upgrade and decarbonize these operations.

A British government spokesman said he would not comment on ongoing negotiations with a private company.

The UK’s cross-party Business and Trade Committee is conducting an inquiry into the UK’s electric vehicle battery manufacturing sector.

Its chairman, Darren Jones, said Tata’s decision to locate the new factory in the UK was “very welcome”, but raised questions about the scale of the subsidies provided.

“We will, however, want to reflect on the grant package that was necessary to secure this decision and whether this approach is scalable to meet the need for additional battery manufacturing sites for other carmakers across the UK.”

These concerns have been echoed by the FairCharge Group, which represents other companies in the electric vehicle sector.

FairCharge founder Quentin Willson said there was fear in the industry that Tata’s investment could “wipe out” all available government support.

“I really hope other companies in the battery, critical minerals, charging and electric vehicle supply chains aren’t overlooked,” he said.

Andy Palmer, a former executive at Nissan and Aston Martin – who now works for electric vehicle charging company Pod Point – said the UK needed a strategic industrial strategy to “raise all boats”.

“Support should come in all shapes and sizes for businesses of all shapes and sizes,” he said. “A gigafactory is not synonymous with success, it is equivalent to part of the puzzle.”