The government has pledged substantial funding to support Britishvolt, the company planning to build a manufacturing plant for electric vehicle (EV) batteries in Blyth, Northumberland.

When complete, Britishvolt claims the factory will produce enough batteries for more than 300,000 EVs a year.

The government’s support for the project is intended to unlock a significant amount of further support from private investors.

The BBC understands the government has committed about £100m through its Automotive Transformation Fund, and Britishvolt has also announced backing from investors Tritax and Abrdn, that should unlock about £1.7bn in private funding.

Peter Rolton, Britishvolt executive chairman, explained: “This announcement is a major step in putting the UK at the forefront of the global energy transition, unlocking huge private sector investment that will develop the technology and skills required for Britain to play its part in the next industrial revolution.

“The news is the first step in creating a commercialised battery ecosystem, that perfectly aligns with the existing R&D ecosystem. Britishvolt will be the anchor for attracting further sections of the supply chain, be it refining or recycling, to co-locate on the Britishvolt site. This not only shortens supply chains but also allows for partners to access the abundance of renewable energy on site to truly power low carbon, sustainable battery production.

“It will also allow us to catapult our unique tailormade business proposition on a global scale, with sites already selected for development in other countries.

“I’m especially proud that this is such a major boost for Northumberland – the county of my birth – bringing around 3,000 direct highly-skilled jobs and another 5,000+ indirect wider supply chain roles into the region.

“This is a truly historic day and marks the start of a truly exciting move towards a low carbon future. One with Britishvolt batteries at the very centre of that strategy.”

Prime minister Boris Johnson, said: “Britishvolt’s plan to build a new gigafactory in Northumberland is a strong testament to the skilled workers of the North East and the UK’s place at the helm of the global green industrial revolution.

“Backed by government and private sector investment, this new battery factory will boost the production of electric vehicles in the UK, whilst levelling up opportunity and bringing thousands of new highly-skilled jobs to communities in our industrial heartlands.”

Kwasi Kwarteng, business secretary, commented: “Today’s news is a major boost for Britain and a resounding vote of confidence in the north-east economy.

“Britishvolt’s planned gigafactory will not only enable the UK to fully capture the benefits of a booming electric vehicle market, but will bring thousands of highly-skilled, well-paid jobs to the North East.

“In this global race between countries to secure vital battery production, this government is proud to make the investment necessary to ensure UK’s retains its place as one of the best locations in the world for auto manufacturing.”

Minister for Investment Lord Grimstone said: “Our support for Britishvolt’s gigafactory is not only set to bring new jobs to the people of Northumberland, but by unlocking huge amounts of additional investment, we are helping to turbocharge the local economy. All of which will not only transform Blyth, but also help us build the batteries that will power our electric vehicles for a cleaner, greener future.

“Through our Plan for Jobs the whole of the government is focused on protecting, supporting and creating jobs across the country. The government is investing millions to develop the supply chain for cleaner vehicles in the UK, while working with our auto industry to ensure it remains competitive for years to come. As part of the Net Zero Strategy, we recently announced £350 million of funding for the Automotive Transformation Fund. This is additional to the £500 million already announced as part of the 10 Point Plan. Ending the sale of new petrol and diesel cars in the UK by 2030 will put the UK on course to be the fastest G7 country to decarbonise cars and vans.”