The UK government has pledged £2.5bn funding over the next decade to boost production of zero-emission vehicles. The DRIVE35 scheme will support UK auto businesses through new and
The UK government has pledged £2.5bn funding over the next decade to boost production of zero-emission vehicles.
The DRIVE35 scheme will support UK auto businesses through new and improved funding competitions that will support a wide spectrum of projects to help the transition to zero-emission vehicle manufacturing.
These range from start-ups, prototypes and early automotive innovation through to established high-volume manufacturing and multi-billion-pound gigafactories.
The new programme forms part of Advanced Manufacturing Sector Plan, part of the UK’s modern Industrial Strategy. It will commit £2bn in funding to 2030 alongside an additional £500m for research and development to 2035, signalling a decade-long commitment to UK automotive innovation.
The Department for Business and Trade said the cash would provide certainty to the sector, give innovators the confidence to invest in the UK and support the latest in research and development, unlocking capital investment in zero-emission vehicles, batteries and their supply chains.
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.”
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 £6bn of investment from the private sector, creating thousands of jobs across the UK economy.
The Department for Business and Trade has also announced more than £300m for specific UK automotive manufacturing firms and projects. This includes over £100m of capital investment for UK automotive manufacturing via the ATF, approximately £140m in combined government and industry R&D investment, and £18m from the new £150m Connected & Automated Mobility (CAM) Pathfinder programme.
Examples of projects gaining government support include Bolton-based Astemo, which is investing £100m to support production of electric vehicle components in the UK.
The West Midlands will also get a boost from the recent £15m 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.
The Society of Motor Manufacturers and Traders (SMMT) said the dedicated new automotive programme was further evidence of the sector’s importance to economic growth.
Mike Hawes, chief executive, went on: “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 of 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.”
The programme will also upgrade the offering for investors across three streamlined pillars: Transformation, Scale Up and Innovation. Tomorrow (15 July 2025), the Government will open the following competitions across the DRIVE35 programme:
