The UK government has announced a £380 million grant to support battery manufacturer Agratas in building one of Europe’s largest gigafactories in Somerset.
The investment is part of a wider initiative that has seen the government invest over £700 million in advanced manufacturing to support the domestic battery manufacturing industry.
The government said the project will secure around 4,200 direct jobs and thousands more across the supply chain. It will also create 300 apprenticeships, supported by a dedicated battery manufacturing training unit.
The funding forms part of the government’s Modern Industrial Strategy, which aims to expand investment in high‑growth technology sectors.
Once operational, the government expects Agratas to generate approximately £43 billion in economic growth over 25 years, support domestic battery production for electric vehicles, and reduce reliance on imports. The plant is expected to produce battery cells for carmaker Jaguar Land Rover.
The government said the investment highlights the growing importance of battery technology as the UK automotive sector transitions to electric vehicle production and digital manufacturing systems.
It added that the funding will support research and development, supply chain resilience and skills development across the advanced manufacturing sector.
Alongside the gigafactory investment, £47 million has been allocated to battery R&D projects through the Battery Innovation Programme, while £190 million will be directed towards the automotive sector to support electric vehicle innovation and prototype development.
The government said manufacturers will also benefit from digital transformation funding, including support from the Made Smarter Innovation Programme, which focuses on utilising technologies such as AI and robotics to improve productivity among small and medium‑sized firms.
The investment is designed to accelerate the adoption of advanced manufacturing technologies, strengthen domestic supply chains and position the UK as a competitive location for battery production and clean energy innovation.
“This government is backing the industries of the future by investing in auto firms, SMEs and battery manufacturers across the country – helping to boost economic growth and our resilience, secure jobs and put more money in people’s pockets,” said business secretary Peter Kyle. “In an unstable world, our Modern Industrial Strategy is providing investors the stability and confidence they need to plan not just for the next year, but for the next 10 years and beyond.”
The announcement coincides with the news that OpenAI has put its ambitious £31 billion Stargate UK data centre project on hold, citing the country’s high energy costs and regulatory landscape.
