Tata's new GIGAfactory won't be made in India!

A lot of the biggest companies in the world are trying to set up production facilities in India for the past few years. The trend has been shifting in favour of India over other countries due to a huge and ever-increasing customer base in addition to low labour costs and government incentives.

But one of the biggest business groups in the world, the Tatas, has decided to set up a “gigafactory” (giga refers to the massive size of the factory) in the UK. It is reported to cost around $5 billion and create up to 4000 jobs in the country.

The factory would give the UK domestic production of EV batteries, something the nation is in urgent need of. This is because the British automakers have to comply with the post-Brexit rules that would require more EV components to be produced locally to avoid additional tariffs on the trade between the UK and the EU, which would kick in 2024. The UK government has its own goal of banning new gas vehicle sales by 2030 too.

While these rules might be loosened a bit and for some time in the future, companies eventually will have to be able to produce as much as possible onshore so that more money is saved and more jobs are created. And for this to happen, the UK government would have to give subsidies in the millions of dollars for the auto sector to keep working at such massive scales. Reportedly, Tata Motors is also being given hundreds of millions of dollars in subsidies for the $5 billion gigafactory, which makes sense.

So we understand the UK government’s motivation to attract such huge business to their shores. But why would an Indian conglomerate want to make new factories somewhere else than India, where the government is already very focused on things like the “Make in India” campaign?

Well, you might already know this, but Tata Motors already owns Jaguar Land Rover, which is based out of the UK. And after starting production of the batteries in their factory, they will be producing enough to supply the brands under JLR and other automakers too.

JLR already has its major client base in the UK and the EU. So, Tata Motors obviously would be getting much more and easier business by producing in the UK. So do you think this information is grounds for the value of Tata Motors to grow massively? And would you want to invest in the company because of that?

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