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.
The Government announced 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.
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.
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.
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.
