The Asian automotive manufacturing company, Tata Motors, is closing in on deal with UK government to secure funding for a new gigafactory, in Somerset. The factory will be a battery plant that will provide batteries to JLR (Jaguar and Land Rover) vehicles. The Indian conglomerate, Tata, is currently deciding between building the factory in the UK or Spain.

Last week, UK government offered the owner of JLR £500m in subsidies as an incentive to build the gigafactory in the UK. Jeremy Hunt put forward the package just days after warnings came from carmakers over the Brexit trade deal and the threat it poses to the future of the British automotive industry. As part of the package, Hunt also offered the construction of improved road access to the proposed site for the gigafactory.

Confirmation of the deal would be a massive boost for EV battery production in Britain. Although the agreement has not been decided on yet, there are big hopes that an announcement will be coming this week.

However, concerns remain about the high energy prices in the UK, which could pose as a possible dealbreaker for the parent company of JLR. Compared to rivals in the EU, the UK’s energy prices are significantly higher, posing as an issue for securing the deal. The JLR chief executive, Adrian Mardell, said that, even if the company chooses to build the factory in Spain, they will continue to retain its car factories in the UK.

According to the The Financial Times, however, the government remains ‘increasingly hopeful’ of pushing the deal through.