Jaguar Land Rover (JLR) owner Tata Motor is said to be seeking over £500 million of Government funding to help establish an electric vehicle (EV) battery factory in the UK.

A report in the Financial Times said that the Indian OEM was weighing-up whether the UK or Spain would be the best base for its battery production facility and suggested that ministers had been given just weeks to make a decision.

One source of the newspaper described the ultimatum as another “pivotal” moment for UK car manufacturing following the collapse of Britishvolt, which was later bought out of administration by Australian start-up Recharge Industries.

The FT reported that Tata Motors had come close to announcing plans for a battery factory in Somerset last year – alongside Chinese production partner Envision – but delayed the decision as Tata Group was simultaneously seeking British government support for its UK steel business.

It was later reported that government would deliver a package amounting to around £300m to support a decarbonisation process at Port Talbot which Tata suggested would cost £2bn.