The development is thought to be an “integral part” of Tata Group’s pledge to renewable energy storage services and electric mobility.
The flagship electric vehicle battery factory is due to start production in 2026, with Tata Group’s strategic growth plans beginning with a rapid ramp-up phase.
It is understood that the gigafactory will be located in Somerset, and have the capacity to produce 40GWh of cells each year for various applications within the energy and mobility sectors.
Understood to be in Somerset, it will have a capacity to produce 40GWh of cells annually for a variety of applications within the mobility and energy sectors.
N Chandrasekaran, chairman of Tata Sons, commented: "Today, I am delighted to announce the Tata Group will be setting up one of Europe's largest battery cell manufacturing facilities in the UK.
"Our multibillion-pound investment will bring state-of-the-art technology to the country, helping to power the automotive sector's transition to electric mobility, anchored by our own business, JLR.
"With this strategic investment, the Tata Group further strengthens its commitment to the UK, alongside our many companies operating here across technology, consumer, hospitality, steel, chemicals, and automotive.
"I also want to thank His Majesty's Government, which has worked so closely with us to enable this investment."
UK Prime Minister Rishi Sunak said: "Tata Group's decision to build their new gigafactory here in the UK – their first outside of India – is a huge vote of confidence in Britain. This will be one of the largest ever investments in the UK automotive sector.
"It will not only create thousands of skilled jobs for Britons around the country, but it will also strengthen our lead in the global transition to electric vehicles, helping to grow our economy in clean industries of the future."