A Chinese manufacturer of electric vehicle batteries is in talks to invest more than £1bn to build a giant new factory on the outskirts of Coventry.

EVE Energy, which says it employs 28,000 staff worldwide, is understood to be in talks to construct a 5.7m sq ft gigafactory, which will form one of the main parts of the planned UK Centre for Electrification, an investment zone in the West Midlands.

Sources with knowledge of the talks confirmed EVE’s interest in the project, which could create up to 6,000 jobs in partnership with local councils and Coventry airport, where the plant will be located.

The Chinese company is thought to be considering committing an initial £1.2bn to the project, according to the Sunday Times, which first reported the discussions. Subsequent phases of the works are expected to expand the site, which would make it almost twice the size of Nissan’s electric battery factory in Sunderland.

Last year, Tata Group, the owner of Jaguar Land Rover, also made a £4bn pledge to build an electric car battery gigafactory in Britain. The plant, to be sited in Somerset, will bring 4,000 new jobs to the area.

The West Midlands is home to a number of carmaking facilities – including ones run by Jaguar Land Rover, Aston Martin Lagonda and BMW – as well as the UK’s largest battery research centre, the UK Battery Industrialisation Centre.

The Coventry gigafactory plan could attract total private funding of up to £2bn, but any investment is likely to be contingent on hundreds of millions of pounds of UK subsidies.

News of a potential investor comes five months after the West Midlands Gigafactory project said in October 2023 that it was “in advanced discussions with several leading Asian battery manufacturers about future investment at the Coventry site”.

A spokesperson for the project said: “Based in Coventry, West Midlands Gigafactory is the only available site in the UK that sits within an investment zone and has planning permission for a large-scale battery manufacturing facility. We are in discussions with a number of global battery manufacturers, but these remain confidential.”

A government spokesperson added: “We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing as we transition to electric vehicles, while ensuring taxpayer money is used responsibly and provides best value. We do not comment on speculation or the commercial affairs of private companies.”

EVE Energy did not respond to efforts to contact the company for comment.