Jaguar Land Rover will invest close to £1bn to build electric cars in the UK, securing thousands of jobs and helping the prospects of the UK car industry surviving the global transition to battery power in the coming decades.

The company said last week that it will re-tool its Castle Bromwich plant over the summer in preparation for making the next generation of electric and hybrid Jaguar models at the site.

“We are committed to making our next generation of zero-emission vehicles in the UK,” said JLR chief executive Ralf Speth.

Announcing the move, Mr Speth called on the government to work with business to create a battery ‘gigafactory’ in the UK to make Britain “less dependent on essential materials sourced abroad today”.

“If batteries go out of the UK, then automotive production will go out of the UK,” added Mr Speth. “The battery is 40 per cent of cost of a battery electric vehicle. We want to keep this kind of added value inside the UK.”

The Jaguar plant at Castle Bromwich in the West Midlands will make electric Jaguar cars using battery packs from the company’s nearby site at Hams Hall and electric components from its Wolverhampton engine plant, but will still rely on battery cells imported from Asia.

Several European countries, including Germany and Sweden, are trying to attract gigafactories to make electric car batteries, to provide local supply for carmakers and to break the dominance of plants in China, South Korea and Japan.

The first new battery car to be made at Castle Bromwich will be an electric XJ, the company’s executive saloon, used by the prime minister as well as several cabinet members. The site will continue to make the XE, XF and F-Type models currently produced there.

The investment, of close to £1bn, will also secure the future of the site, which has moved to a four-day week because of weak demand for current models. It is also a sign of confidence for the future by JLR, which is shedding 4,500 jobs after falling to a loss last year.

While Nissan makes the electric Leaf in Sunderland, several companies have opted to build batteries or electric models outside of the UK. Jaguar previously chose to build its first electric car, the I-Pace, in Austria, citing a poor domestic supply chain.

Earlier this year Honda announced plans to close its plant in Swindon to focus on building electric and hybrid models in Japan, while BMW will later this month unveil the new electric MINI, a car assembled in its Oxford facility using imported German batteries.

Mr Speth said on Friday that securing a UK centre for battery production was key to the future of British car manufacturing. “Affordability will only be achieved if we make batteries here in the UK, close to vehicle production, to avoid the cost and safety risk of importing from abroad,” he said.

“The UK has the raw materials, scientific research in our universities and an existing supplier base to put the UK at the leading edge of mobility and job creation,” he added.