Plans to build a plant for producing electric car batteries in Wales have moved a step closer, following the signing of a memorandum of understanding (MOU) with the Welsh Government to build a factory in St Athan, Vale of Glamorgan.

It is anticipated that the initial £1.2 billion of investment from Britishvolt could eventually create up to 3,500 jobs. Construction is scheduled to begin in early 2021.

The Welsh Government has said the MOU was an “important next step ahead” but the deal is not yet finalised.

The project is now in the hands of the UK Government to provide funding through its automotive transformation fund. 

Britishvolt's chief operating officer, Orral Nadjari, said it was a “very exciting milestone”.

“The agreement that we have come to with the Welsh Government is that we're going to exclusively build our batteries for electric vehicles in Wales.

“Hiring local people, including those currently out of work, and developing strong relationships with nearby educational facilities will be a priority for us to ensure a stream of skilled staff.

“Britishvolt will also encourage other businesses to invest in the region with the aim of creating a ‘hub’ of battery electrification – building out our very own infrastructure and supply chain ecosystem.”

Bro Tathan, a former Ministry of Defence site now owned by the Welsh Government, is already home to an Aston Martin electric car plant, which produced its first vehicle last week.

The development is potentially game-changing for the South Wales economy and could help position the region as a world leader in the production of electric vehicles.