Government deal for Amazon-backed Rivian electric car plant in Somerset 'hangs in the balance'

A deal between the Government and an Amazon-backed US carmaker to build a giant electric vehicle (EV) factory in the UK is hanging in the balance over the financial incentives Britain can offer.

California-based Rivian is said to be eyeing an area between Bristol and Bridgwater for a UK plant.

Something that would be beneficial to securing the deal - which would be worth more than £1bn to the UK - could be to provide the Bristol region with freeport status.

Earlier this year, Bristol lost out in its bid for a freeport - a designated zone where the normal tax and tariff rules of the country do not apply - despite Prime Minister Boris Johnson saying in November it was a “strong contender” for the status.

There are now eight freeports in England, including one nearby in Plymouth. In these areas, goods can be imported, manufactured and re-exported without being subject to customs checks, paperwork, or import taxes, known as tariffs.

There are no current plans to designate more freeports in England beyond those allocated in the bidding process.

David Brown, chief executive of Bristol Port and Local Enterprise Partnership board member, is now calling on the Government to reconsider issuing freeport status to the Bristol region.

He said: “It would be a complete travesty if we were to let this opportunity slip through our fingers as a region, but critically as a nation, given the government’s unequivocal commitment to net zero and high-tech manufacturing.

“Surely the Rivian deal is the very essence of the freeport model; it would be the most significant car deal since the 1980s and sends the perfect message for the benefits of Brexit and underpins aspirations of net-zero and green economy.”

Mr Brown said the region remained “very disappointed” it was not selected to be a freeport “despite a fully compliant bid”.

He added: “This billion-pound opportunity requires our freeport status to be re-examined. There can only be an upside for regional jobs, the regional economy and the nation as a whole.”

If Rivian builds a factory in the UK, it would be its first outside the US.

In the South West alone it could create 10,000 jobs and another 90,000 indirect roles as part of the supply chain.

If it moves ahead, it would be the biggest car deal of its kind in the UK since the 1980s - and a major boost to the country’s automotive industry, which saw production slump to its lowest level since 1984 last year amid the pandemic.

In July, Honda closed its Swindon plant after three decades of production, and the 370-acre Wiltshire site was sold off to a developer of new-build industrial and logistics facilities.

But in recent weeks the sector has been buoyed by news of Nissan’s announcement of plans to create hundreds of jobs at its plant in Sunderland, and Vauxhall's owner, Stellantis, confirming a £100m investment into its Ellesmere Port plant.

It would also underpin the Government’s green agenda, which is aiming to phase out the sale of petrol and diesel cars in the UK by 2030.

Rivian is said to have identified a vast 616-acre smart campus called Gravity - off junction 23 of the M5 - as the potential site for the plant.

It is understood the location is the only area in Britain large enough - and shovel-ready - for such a project.

Martin Bellamy, chief executive of the Gravity Smart Campus, said: “Gravity is having a number of discussions with extremely exciting occupants in the electric vehicle space.

“It makes absolutely no sense to me that a port the quality and size of Bristol, tied to a site as big as Gravity, is not given freeport status.”

The deal could also be considered a test of the long-term impact of Brexit, which had led to predictions that Britain’s automotive sector would meet its demise following a withdrawal from the European Union.

Tesla boss Elon Musk previously admitted uncertainty around the UK leaving the bloc led to his company choosing Germany over Britain for its first European factory.

Mr Bellamy added: “When we were in the midst of the Brexit negotiations Tesla planted its flag in Berlin. Here we are, with Brexit outcomes known, with the largest opportunity you can imagine.”

'We can’t be kept in the dark with deals agreed in shadowy Whitehall corridors'

West of England metro mayor Dan Norris, who was elected in May, said the region was “ideally placed” for an electric “revolution”.

“[The West of England] is a high-tech area with expertise and knowledge borne out of our world-beating aerospace sector, our universities and research facilities,” he said.

He added: “We can’t be kept in the dark with deals agreed in shadowy Whitehall corridors. We're on the verge of a power revolution and I’m determined that the West of England will be right at the front.”

A Government spokesperson said: “Free trade will grow our economy in every part of the UK and help us build back better from the pandemic.

“The Government is working hard to attract inward investment into the UK to accelerate the growth of new industries and create jobs, however, we do not comment on speculation about individual investments.”

Last month, Rivian closed a $2.5bn (£1.8bn) private funding round, led by Amazon’s Climate Pledge Fund, US investment firm D1 Capital Partners and Ford.

It takes the amount the company has raised since 2019 to a whopping $10.5bn (£7.5bn).

Rivian has been approached for a comment.