The £5.2 billion Agratas gigafactory in Somerset is facing significant delays, potentially impacting Jaguar Land Rover's (JLR) plans for mass-producing electric vehicles. The factory's operational start date, initially set for 2026 and revised to 2027, now appears unlikely to be met even by the latest target of January 2028.
One of the main concerns is the battery supply chain, with Agratas experiencing difficulties in securing vital components from its construction contractor. The factory's primary contractor, Sir Robert McAlpine, was dismissed after a budget mismatch emerged, with the project now expected to exceed its £800 million cost by at least £500 million.
Agratas has been working to align UK construction costs with those of its Sanand, India-based gigafactory. However, sources close to the project suggest this approach led to tensions and unachievable targets, contributing to the contractor's departure. The new contractor, Tonroe Group Ltd, will need to rapidly familiarise itself with the factory's complex requirements, including constructing facilities for handling hazardous electrolytes and building one of Europe's largest clean rooms.
The project is already behind schedule in several critical areas. Procurement of crucial parts for the electricity substation has yet to be completed, which can take two years or more. Work on an important ring road has not commenced, and the main building itself is significantly delayed due to slow purchasing decisions.
Furthermore, high staff turnover within Agratas's UK operations has been noted, including key engineering personnel departures. This ongoing turmoil could pose significant challenges for JLR, which relies heavily on Agratas for battery cells to power its new electric Jaguar and Land Rover models, including the already postponed electric Range Rover.
JLR's reliance on the Agratas gigafactory is a strategic imperative, with 44% of its £1.7 billion forecast revenue in 2024-25 expected to come from electric vehicle sales. Delays in securing battery supply could therefore have far-reaching implications for the company's financial performance and future growth prospects.