India‘s Tata is considering setting up a battery cell plant for electric vehicles (EV) in Spain or Britain, a source with knowledge of the matter told Reuters, as the carmaker seeks to boost supply chains in Europe.
Tata’s chief financial officer told Reuters last month the carmaker was considering setting up plants in India and Europe to produce battery cells for EVs. In Europe it would aim to provide batteries for its luxury Jaguar Land Rover unit, which has manufacturing facilities in Britain and Slovakia.
The company told the Spanish government following talks late last year that it was considering the country and Britain as the two top locations for the plant, said the source who declined to be identified due to the sensitivity of the issue.
Tata was attracted by Spain’s allocation of European Union pandemic relief funds to promote EV and battery manufacturing, and its status as a member of the EU unlike Britain following its departure from the bloc, added the source.
A company spokesperson said “as a policy and practice, Tata Motors doesn’t comment on speculation”.
The Spanish government did not respond to a request for comment.
The location being considered by Tata in Spain is an industrial lot in the town of Zuera, outside the city of Zaragoza in northeastern Spain, the same site Volkswagen considered for a battery plant it is now building elsewhere in the country, the source said.
Tata representatives from India and Britain participated in the joint meetings with officials from the Spanish and the Aragon regional governments, the source said, adding that there were also visits to the potential location.
Jaguar Land Rover and the Aragon regional government which includes Zuera declined to comment.
As Europe’s second largest car-producing country behind Germany, Spain launched in 2021 an ambitious programme to attract EV-related investments mostly using EU funds.
It was seen as a key factor in convincing Volkswagen to locate its Southern Europe battery plant in Spain and plans to start manufacturing EVs in the country.
The programme, however, only allocated 877 million euros ($958.47 million) last year out of the 2.9 billion euros’ overall budget due to technical and administrative issues, the government said.
The remaining funds will be disbursed in new phases and could benefit new contenders, such as Tata.
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Battery-powered electric cars accounted for 12.1 percent of new car sales, compared to 9.1 percent in 2021 and 1.9 percent in 2019, according to the European Automobile Manufacturers’ Association (ACEA).