Players in the UK’s electric vehicle battery industry welcomed on Tuesday speculation that Tata Motors will announce a gigafactory investment in Somerset on 19 July, Kallanish reports.

The long-standing rumour suggests that the Indian conglomerate, parent company of Jaguar Land Rover (JLR), has managed to secure subsidies worth “hundreds of millions of pounds” to establish cell production in South West England. Previously, market sources suggested the company was after £500 million ($652m) in government funding.

State aid negotiations for a potential 40-gigawatt-hour factory have been going on for months. If confirmed, the new investment could lead to the creation of up to 9,000 jobs in the Bridgwater area, the BBC estimates. Additionally, it could restore hope for UK EV manufacturers.

“This is the first, hugely important, step towards a new industry for the UK, founded on our history of car manufacturing and related industries,” comments Jeremy Wrathall, ceo of Cornish Lithium. “Importantly this will incentivise other parts of the supply chain such as battery raw materials, including lithium. Government support remains essential as this demonstrates that the UK is determined to be a major player in electric vehicles and will not stand by while another of our vital industries walks out of the door and never comes back.”

Diana Mehta, chief scientist at The Battery Recycling Company, says the potential announcement is “instrumental in ensuring the UK remains competitive in the battery race.” However, she notes gigafactories are only one element of a thriving battery industry. “Similar attention and support must be given to the rest of the battery supply chain, both upstream and downstream,” Mehta adds.

In echoing comments, Andy Palmer, ceo of research firm Palmer Automotive and interim ceo of EV charger company Pod Point, welcomes the news but calls for caution. “If the UK dishes out the bulk of its battery-related support to one brand, then we still face likely car industry Armageddon. Support must come in all shapes and sizes for businesses of all shapes and sizes,” he says.

The supposed deal is likely to include cash grants, discounts on energy costs and training and funding research. Neither the government nor Tata has commented on the reports.

“The government should see this subsidy as the beginning of building a battery ecosystem in this country,” adds Quentin Wilson, founder of campaign group FairCharge. “There is a genuine fear in the industry that it could sweep up all available government support, which would be hugely detrimental to the future health of UK plc in the race to zero.”

The gigafactory would mean a win for the UK government over Spain, which was also bidding for Tata’s investment. It would also strengthen the feasibility of JLR maintaining EV production in the country. Potentially, excess capacity could also be marketed to other manufacturers operating in the UK such as Stellantis’ Vauxhall, which has recently warned it was not competitive to produce EVs in the UK without a local battery supply chain.