Chinese battery manufacturer Eve Energy is said to have offered £1.2 billion ($1.51 billion) to develop the proposed West Midlands gigafactory project in Coventry, UK.

Citing unnamed sources, The Sunday Times reported Eve is “weeks away” from closing a deal, with the government expected to provide “hundreds of millions of pounds” in subsidies.

The project put forward by the Coventry City Council and Coventry Airport Ltd is the only gigafactory site in the country with a confirmed investment zone status. This means significant tax incentives and breaks for investors for up to 10 years, Kallanish notes.

The public-private JV says the site could host a 60-gigawatt-hour gigafactory, meeting demand from 600,000 EVs annually. According to its website, the project, now known as UK Centre of Electrification, has the potential for a £2.5 billion investment.  It could create 6,000 direct new jobs.

Last October, the JV confirmed it was in advanced discussions with “several leading Asian battery manufacturers” who want to develop a presence in the UK. It said the location offers an “all-in-one solution for battery research, industrialisation, manufacturing, testing, recycling and electrified logistics.”

The West Midlands region is a global centre of automotive R&D including for Chinese state-owned carmaker Changan Automotive. It’s also home to Jaguar Land Rover, Aston Martin, as well as the UK Battery Industrialisation Centre and parts manufacturers.  

Eve, which is yet to confirm its interest, held its first lithium battery international conference last week in China. Its chairman Liu Jincheng said that the company continues to expand its product portfolio and establish regional headquarters and manufacturing factories in the US, Europe and Asia. The strategy is to “get close to customers, respond quickly and work together with global partners to achieve a green future with high-quality lithium batteries and a seven-start service system,” he said.

If confirmed, the news is likely to be welcomed by the automotive and battery industries in the UK. Yet, some market observers note that once again the investment is coming from overseas, adding to investments by India’s Tata group who own Agratas and China’s Envision group who own AESC.

“The government must now support the growing UK battery start-up ecosystem, to make sure that while foreign companies are building capacity, it is UK technology that is used in the batteries these facilities will produce,” comments James Frith, head of European operations at Volta Energy Technologies. The US-based venture fund focuses on the global battery supply chain.