Backing British Industry: Government launches £2.5bn DRIVE35 programme to power UK auto investment and jobs
Source: gov.uk (2025-07-12)

UK auto firms will benefit from a £2.5 billion commitment over the next decade that will support thousands of jobs and help ensure the UK remains at the forefront of zero-emission vehicle development.

- UK auto sector boosted by £2.5 billion under DRIVE35, as government launches new and improved funding competitions, supporting projects which help the transition to zero-emission vehicle manufacturing.
- Package forms part of the UK’s modern Industrial Strategy, which takes bold ambition to significantly increase business investment in the advanced manufacturing sector by 2035.
- Government also announces over £300 million of investment for specific auto projects, supporting the UK’s thousands of high-value manufacturing jobs and delivering on the Plan for Change.
UK auto firms will benefit from a £2.5 billion commitment over the next decade that will support thousands of jobs and help ensure the UK remains at the forefront of zero-emission vehicle development.

Government is today announcing the launch of DRIVE35, comprising new and improved funding competitions that will support UK businesses. The programme will fund a wide spectrum of projects which help the transition to zero-emission vehicle manufacturing - targeting established high-volume manufacturing and multi-billion-pound gigafactories, all the way to start-ups, prototypes and cutting-edge automotive innovation.

The new programme was announced in the Advanced Manufacturing Sector Plan, part of the UK’s modern Industrial Strategy. It will commit £2 billion in funding to 2030 alongside an additional £500m for research and development to 2035, signalling a ten-year commitment to UK automotive innovation.

The cash will provide certainty to the sector, give innovators the confidence to invest in the UK and will support the latest in research and development, unlocking capital investment in zero emission vehicles, batteries and their supply chains.

The automotive sector contributed £21.4 billion in GVA to the economy in 2024 and currently employs 132,000 people across all parts of the UK – including many highly-skilled, highly-paid roles, and apprenticeships. The transition to zero emissions is the biggest opportunity of the 21st century to attract investment, harness British innovation, and deliver growth for generations to come.

The UK was also the largest EV market in Europe in 2024 and the third in the world with over 382,000 EVs sold – up a fifth on the previous year. There are now more than 82,000 public chargepoints in the UK – with one added every half an hour – ensuring that motorists are always a short drive from a socket.

Business and Trade Secretary Jonathan Reynolds said:

We’re helping British carmakers get to the front of the pack by working hand in hand with investors to build a globally competitive electric vehicle supply chain in the UK as we deliver our Plan for Change.

We’re taking action to back the industry for the future with the biggest set of announcements for the sector in the last decade. This includes securing a landmark trade deal with the US to bring down tariffs for British car manufacturers, measures in our modern Industrial Strategy to lower electricity prices and updating the ZEV mandate, supporting UK manufacturers to safeguard jobs, and secure the future of the sector.

Economic growth is our number one priority, and by funding our world leading auto sector we are creating the right conditions for increased investment, bringing growth, jobs, and opportunities to every part of the UK.

The funding announced today forms part of government’s bold ambition to significantly increase business investment in the advanced manufacturing sector by 2035, giving British firms an edge in the frontier industries of the future and driving growth across the UK.

DRIVE35 will build on previous successes with the Automotive Transformation Fund (ATF) and the Advanced Propulsion Centre UK (APC) R&D competitions, which between them leveraged over £6 billion of investment from the private sector, creating thousands of jobs across the UK economy.

The Department for Business and Trade today also announces over £300 million for specific UK automotive manufacturing firms and projects. This includes over £100 million of capital investment for UK automotive manufacturing via the ATF, approximately £140 million in combined Government and industry R&D investment, and £18 million from the new £150m Connected & Automated Mobility (CAM) Pathfinder programme.

With Government support, Bolton is set to benefit from over £100 million in investment from Astemo Ltd., which will be vital to the production of electric vehicle (EV) components in the UK. This investment will produce new generations of electric inverters, supporting over 220 direct high-value jobs in the region and hundreds more in the wider UK supply chain.

The West Midlands will also welcome a recent £15 million investment from Dana to produce parts that are crucial for EV manufacturing. Dana’s investment will ensure skilled jobs in the region, supporting over 100 direct jobs over the long term.

Mike Hawes, SMMT Chief Executive said:

The creation of this dedicated automotive programme is further evidence of the sector’s importance to economic growth. Delivered as part of the Industrial Strategy, DRIVE35 has the potential to unlock investment and innovation in the UK, supporting jobs and creating wealth across the country. The importance of a long term, cross-government strategy with specific measures for automotive cannot be understated given the challenges facing the sector amid geopolitical uncertainty and fierce global competition. DRIVE35, and the wider measures identified in the Industrial Strategy, must now be implemented at pace to ensure the UK is amongst the leaders in next generation automotive technologies.

Ian Constance, CEO, Advanced Propulsion Centre UK and Zenzic said:

This new investment underlines the commitment from Government to secure advanced manufacturing in the UK. I am pleased that the APC, Zenzic, and its delivery partners are here to facilitate a new wave of funding in the automotive industry, supporting innovation, driving scale-up, and enabling transformation.

Today, we have announced projects receiving four types of grants that boost the UK’s leadership in automotive manufacturing. They will enable the rapid development of demonstrators featuring cutting-edge technology, accelerate ambitious SMEs, and support vital collaborative R&D innovation. This will encourage further investment in the UK’s growing zero-emission supply chain, safeguarding skilled jobs, building on the country’s reputation as a world-leader for technology.

Thanks to the wide range of eligible technologies under the new competitions, DRIVE35 funding will benefit UK auto businesses of all sizes and maturities, from small-scale innovators to large-scale established global companies. Through targeted investment for successful project applicants, the programme will create tens of thousands of new jobs, stimulate billions in economic growth and investment, and cut millions of tonnes CO2 emissions.

The programme will provide a more impactful offering for investors across three streamlined pillars: Transformation, Scale Up and Innovation. Tomorrow the government will open the following competitions across the DRIVE35 programme:
- Automotive Transformation Fund: A new and improved capital funding offer under DRIVE35’s keystone Transformation pillar, supporting large-scale capital investments in the UK, and now with a widened technology scope.
- Scale Up Feasibility Studies: R&D funding to support businesses with strategic thinking on opportunities to scale, creating a pipeline of exciting decision-ready auto projects for UK investment.
- Innovation competitions: Through DRIVE35’s Collaborate and Demonstrate streams, we will build on over a decade of success to support both early-stage and late-stage R&D projects involving innovative technologies and processes.
DRIVE35 will continue the successes of the UK’s world-leading achievements in R&D. As an example, this government has recently committed a combined £70 million of R&D grant funding for over 50 innovative automotive projects. The programme will be delivered by DBT in partnership with APC UK and Innovate UK.

Combined with industry funding, this totals £140 million in new investment for UK R&D. These projects will support technologies including batteries, energy storage, lightweighting and power electronics. Successful applicants include Mercedes and JLR.

Notes to editors:

The winners of the R&D competitions are as follows:

Mobilise: An SME accelerator programme for zero-emission vehicle-related technology, as well as innovations in connected and automated mobility (CAM), and automotive software.
- Allye Energy - London
- Antobot - South East, Chelmsford
- Cellmine - Scotland, Livingstone
- Drisq - West Midlands, Malvern
- ELEVEN - West Midlands, Worcester
- Evie Autonomous - West Midlands, Stoke-On-Trent
- High Temperature Material Systems (HTMS) - South West, Bristol
- Infiniti Recycling - South East, Cambridge
- Kuasasemi - Wales, Cardiff
- Lightning Tree Advanced Materials - London
- Minimal - London
- Muon Tech - West Midlands, Leamington Spa
- Otaski Energy Solutions - North East, Gateshead
- Saif Autonomy - South East, Cambridgeshire
- Senergy Innovations - Northern Ireland, Carryduff
- Super6 - London
- Talos Technology - South East, Banbury
Collaborate: Grants fund projects where companies, and academic institutions, form a consortium to take a product or process to commercial readiness. Please note, these are the lead partners only – there are several partners in each consortium.
- Ionic Technologies International - Northern Ireland, Belfast
- Mint Innovation - West Midlands, Coventry
- Mercedes Amg High Performance Powertrains - East Midlands, Northamptonshire
- Jaguar Land Rover - West Midlands, Coventry
- Phinia Delphi UK - South West, Gloucestershire
Demonstrate: Grants are for companies that are earlier in their product or process development or need a short, sharp sprint to get where they want to be. Please note that these are the lead partners.
- Cummins UK - Yorkshire And The Humber, Huddersfield
- Oxlid - East Midlands, Nottingham
- Thermulon - London
- Expert Tooling & Automation - West Midlands, Coventry
- Cool Van Ltd - North West - Barnoldswick
- Jaguar Land Rover - West Midlands, Warwick
- Batri - Wales, Bridgend
- Magnetic Systems Technology - Yorkshire and the Humber, Rotherham
- Leyland Trucks - North West, Leyland
- Project Four Design - West Midlands, Warwick
- Fluorok - South East, Oxford
- Hydrostar UK - South West, Exeter
- Lorillion - West Midlands, Coventry
- Talos Consulting Services - South East, Banbury
- Ford Motor Company - South East, Essex
- Advanced Electric Machines - North East, Washington
- Maeving - West Midlands, Coventry
- Fering Technologies - London
- Green Lithium Refining - North East, Teesside
- Mercedes Amg High Performance Powertrains - East Midlands, Northamptonshire
- Watt Electric Vehicle Company - South West, Worcester
- Electrified Automation - South West, Bridgwater
- Ulemco - North West, Liverpool
- Clean Air Power Gt - East Midlands, Melton Mowbray
- Donut Lab Development UK - South West, Chippenham
- Electric Aviation Group - South West, Bristol
- Project Four Design – West Midlands, Warwick
- Altilium Metals - South West, Plymouth
- Inetic - Southampton
- Morris Commercial - West Midlands, Evesham
- Ilika Technologies - South East, Hampshire
- Mcmurtry Automotive - South West, Wotton-Under-Edge
- Yasa - South East, Oxford
- Phoenix Carbon - East Of England, Stowmarket