Government dishes out £10m electric car loan to Tata

The government has announced that it is to provide Indian auto giant Tata Motors with a £10m loan to help fund the development of a new electric car manufacturing plant in the UK.

The loan is the first to be issued under the government's Automotive Assistance Programme, which was launched in March this year with a view to supporting investment in low-carbon vehicles.

The funding will form part of a £25m investment programme from Tata Motors intended to expand the company's European Technical Centre in the West Midlands, which employs around 180 people and is focused on developing advanced vehicle technologies, including the company's electric car portfolio.

Precise details of the project were not disclosed, but the investment is expected to focus on the development of a UK manufacturing base for the company's four-seater Indica Vista electric car, which was unveiled last year and is expected to go into production in India before the end of the year.

Business Secretary Lord Mandelson said that the loan, which follows proposals for an electric car incentive scheme and the announcement that Nissan is to build an electric car battery manufacturing plant in Sunderland, underlines the government's commitment to building the electric car sector.

"The government is determined to help the car industry fully exploit the opportunities offered by green manufacturing," he said. "This loan will strengthen our electric vehicle manufacturing expertise, securing and creating high-value engineering jobs in the West Midlands."