British tyre startup ENSO said on Monday that it has signed a letter of interest with the U.S. Export-Import Bank to build a $500 million U.S. plant that when fully operational should be able to make 20 million tyres for electric vehicles annually.

The company said that by 2027 the plant should employ 600 people and produce 5 million tyres annually, adding that potential locations for the plant include Colorado, Nevada, Texas, and Georgia, with "other states in consideration".

ENSO said it aims to recycle all of the tyres it produces in the United States. The company did not provide a target date for reaching full production.

"With strong regulatory support and a significant market opportunity, we are committed to bringing our innovative, low-emission, low-cost tyres to American consumers," ENSO CEO Gunnlaugur Erlendsson said in a statement.

ENSO said technology partner Rockwell Automation and venture capital funds 8090 Industries and Galway Sustainable Capital are also providing support for the new plant.

ENSO has developed tyres specifically for EVs, which can increase their range by 10% and reduce particulate matter emissions by 35%.

The company already sells tyres in Britain and will launch U.S. sales this year.

When tyres make contact with the road, tiny particles are abraded and emitted. The extra weight of EVs linked to their batteries means they emit more particles, a problem that is growing with the rising number of EVs on the road.

The European Union and the state of California have announced rules designed to curb those tyre emissions.

The United States has also passed the Inflation Reduction Act, which has minimum local production requirements for automakers' EVs to qualify for government subsidies.

(Reporting By Nick Carey; Editing by Ros Russell)