4 min read - 9 Apr, 2026
Government confirms £380m grant for gigafactory as part of £700m funding package
The government has unveiled over £700m of new funding for the advanced manufacturing sector, including battery manufacturers, automotive firms and SMEs.
Business Secretary Peter Kyle announced the investment boost in a visit to Agratas in Somerset today (9 April), where a £380m government grant was unveiled to support the firm in building one of the largest gigafactories in Europe, and where the newly constructed factory frame was built using 100% British-steel.
Agratas’ project will help to reduce Britain’s reliance on imports by turbocharging domestic battery production and generating around £43bn worth of economic growth over 25 years when the facility is in full operation.
The site will support 300 apprenticeships, backed by a specialised battery manufacturing training unit to meet the skills needs of Agratas’ gigafactory and the wider battery sector.
A £380m grant is set to help Somerset-based Agratas build one of the largest gigafactories in Europe / Picture: Agratas
Earl Wiggins, vice president of manufacturing operations for Agratas UK, said: “We welcome the UK government’s investment as we build a battery manufacturing facility that will play a vital role in delivering net zero and strengthening the UK’s position as a global leader in battery manufacturing.
“This funding will support the development of our Somerset facility, enabling us to produce battery cells for our anchor customer, Jaguar Land Rover. Over the next year, we will have over 2,200 people working on the site, and that growth will continue over the coming years.”
Alongside support for the Somerset gigafactory, the government is injecting £47m into key R&D battery projects through the Battery Innovation Programme, helping to create skilled jobs, a stronger supply chain and position the UK as a globally competitive destination for battery manufacturing. Recipients include: Denchi Power, Altilium Metals, Watercycle Technologies, McMurtry Automotive, Williams Grand Prix Technologies, Hixal, and Ricardo UK.
Automotive businesses will also benefit from a £190m boost to ensure the auto industry remains ahead of the competition on the global stage. Startups and well-established firms, including Nissan and Jaguar Land Rover, have been awarded £90m in DRIVE35 funding to ramp up innovative prototype and cutting-edge projects – strengthening technological capabilities and improving the affordability of EVs for customers.
Over £700m of new funding has been earmarked for the advanced manufacturing sector, including battery manufacturers, automotive firms and SMEs.
Meanwhile, suppliers in the North East and West Midlands can also capitalise on £100m worth of DRIVE35 grant funding to help transition towards EV manufacturing, which will strengthen supply chain resilience and put Britain on track to become a clean energy superpower.
Additional project winners of the DRIVE35 R&D competition include: HyProMag, Maeving, Elm Mobility, Cummins, Vector Photonics, RAM Innovations, SMR Automotive Mirrors UK, HiSpeed, Ford Motor Company, iCOMAT, Avocet Battery Materials, Sunswap, Tribol Braking, Northern Lithium, API Capacitors, Ryse 3D, Zircotec, and Pacer Technology.
Extra support for the advanced manufacturing sector includes:
• Up to £16.44m from the Made Smarter Innovation Programme for digital technologies like AI and robotics to boost productivity for SMEs.
• Up to £99m from the Made Smarter Adoption Programme to accelerate the adoption of digital technologies for manufacturing SMEs.
• £1.4m for projects exploring autonomous freight and self-driving passenger services in key ports and institutions across the UK.
• Implementing £182m engineering skills package which includes £47m of Adult Skills Funding to train up the next generation of engineers and inventors, £8m for clean energy engineering courses delivered by higher education providers, and £1.8m to expand engineering and construction T Level provision.
Alongside support for the Somerset gigafactory, the government is injecting £47m into key R&D battery projects, with automotive businesses and suppliers in the North East and West Midlands also capitalising on £290m worth of DRIVE35 funding.
Over the last two years, UK Export Finance has backed over £6.6bn of advanced manufacturing investment, and in the summer will announce plans to help UK companies tap into the power of international markets further.
More widely, the British Business Bank is deploying £4bn from the Industrial Strategy Growth Capital into firms across the eight growth sectors, showcasing a step-change in how government backs UK industry – with stronger public finance institutions supporting businesses looking to grow.
Today’s investment announcement sets the stage to crowd in future private investment into key growth sectors like advanced manufacturing, building on the £360bn already secured and 120,000 jobs supported across the country.
Mike Hawes, SMMT chief executive, said: “Recent global events have highlighted the need for resilient supply chains, making this new investment in the sector both timely and important. The UK has a highly skilled and innovative automotive industry, but long‑term competitiveness depends on a policy framework that encourages investment.
“The modern Industrial Strategy provides that forward‑looking support, and today’s announcement demonstrates strong government backing for one of the UK’s most vital industries.”
The latest Industrial Strategy Third Quarterly Update reveals that since the launch of the Modern Industrial Strategy, over £360bn of private investment has been secured across its key sectors, supporting up to 120,000 jobs. Alongside this, the government is cutting electricity costs for energy-intensive manufacturers, reducing unnecessary planning delays and overhauling regulation that holds back UK businesses.
