Plans from Ineos Automotive for an assembly plant for its new Grenadier 4x4 vehicle in South Wales are expected to be pulled.
The company, part chemical giant Ineos owned by billionaire Sir Jim Ratcliffe, has confirmed it has suspended work on its yet to be completed assembly factory in Bridgend, alongside a planned chassis manufacturing operation in Portugual, as part of a review of its Grenadier project.
The factory in Bridgend was expected to create 500 new jobs, as part of an overall £600m investment.
Ineos Automotive has confirmed that it has now entered into detailed discussions with Mercedes-Benz on the acquisition of its Hambach site in Moselle, France.
If a deal is done, with a decision expected in weeks, it will centralise all production for the Grenadier project and see it abandoning plans for its Bridgend and Portuguese operations.
In a statement it said: "Ineos Automotive can confirm that it is reviewing its manufacturing strategy for the new Grenadier in light of the Covid-19 pandemic – which has led to some delays in our development plans, but has also presented some new opportunities in terms of existing manufacturing capacity that were not previously available to us.
"Specifically, Inoes Automotive has entered detailed discussions with Mercedes-Benz on the acquisition of its Hambach site in Moselle, France.
"We have therefore suspended the post-lockdown resumption of work at our sites in Wales and Portugal pending the outcome of this review. Further updates will follow in the coming weeks."
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The Welsh Government said it was disappointed at the review and called on Ineos to honour its commitment to invest in Wales.
Economy Minister Ken Skates said; "I am incredibly disappointed that Ineos has indicated they are reconsidering their move to Wales.
"I have told the CEO that abandoning Bridgend at this late stage, after so much effort and money has been invested in preparing the site, would be a terrible decision for Wales and the 海角视频.
“We have worked closely with the company in good faith to secure the site in Bridgend and it would be a real blow if Ineos reneged on its very public commitment that it would be locating here.
“We have impressed on the company in no uncertain terms the importance of honouring its commitment to Wales and to deliver on its promise to build a British icon here in Britain.”
Last week it revealed the first images of its new offroad vehicle, with clear design references to the old Land Rover Defender.
Last year it confirmed plans for an assembly plant at a site next to the soon to close Ford engine factory in Bridgend. Production was scheduled to commence next year, in a timely investment for the automotive sector in Wales.
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The factory was planned to be built on the 100 acre Brocastle site, which is owned by the Welsh Government, next to Ford factory.
The Ineos project was secured with the promise of a significant financial package of support from the Welsh Government, but with backing also from the 海角视频 Government's department for Business, Energy and Industrial Strategy.
The planned 250,000 sq ft factory at Brocastle Business Park, had a production capacity for 25,000 vehicles a year, with a mooted price tag of £50,000.