The UK Government has committed £2.5 billion over the next decade to support its automotive sector through the newly launched DRIVE35 programme. This initiative is designed to secure thousands of jobs and maintain the UK’s leading position in the global zero-emission vehicle (ZEV) industry. The funding will bolster manufacturing capabilities, strengthen supply chains, and encourage innovation as the sector transitions towards ZEV production.
DRIVE35 introduces new and enhanced funding competitions that aim to support a wide array of projects, from large-scale gigafactories and established manufacturing operations to startups and prototype developers. The programme represents a core component of the UK’s Advanced Manufacturing Sector Plan, which is part of the broader Industrial Strategy to stimulate business investment by 2035.
The DRIVE35 package includes £2 billion in capital funding up to 2030 and an additional £500 million allocated for research and development (R&D) through 2035. This ten-year commitment is intended to provide certainty for investors and industry leaders, fostering a stable environment for long-term innovation and manufacturing in zero-emission vehicles, batteries, and related technologies.
The UK automotive industry, contributing £21.4 billion in gross value added (GVA) in 2024 and employing 132,000 people, plays a crucial role in the economy. The transition to zero-emission technology offers a major opportunity to attract global investment and harness domestic innovation for sustainable growth and employment across the UK.
The UK emerged as Europe’s largest electric vehicle (EV) market in 2024 and the third globally, with more than 382,000 EVs sold — a 20% increase from the previous year. The nation now hosts over 82,000 public EV chargepoints, with infrastructure expanding rapidly. DRIVE35 is intended to leverage this momentum by significantly increasing private investment in advanced manufacturing and solidifying the UK’s competitive edge in emerging technologies.
The programme builds on prior initiatives such as the Automotive Transformation Fund (ATF) and the Advanced Propulsion Centre UK (APC), which previously attracted over £6 billion in private-sector investment and supported thousands of new jobs. DRIVE35’s continuation and expansion of this framework aim to further accelerate industrial and environmental progress.
The Department for Business and Trade has concurrently announced more than £300 million in funding for specific automotive projects. This includes over £100 million in capital investments through the ATF, approximately £140 million in joint government-industry R&D contributions, and £18 million from the new £150 million Connected & Automated Mobility (CAM) Pathfinder programme.
Specific regional investments include over £100 million from Astemo Ltd. in Bolton to support EV component production, expected to generate more than 220 direct jobs and additional employment across the supply chain. In the West Midlands, Dana will invest £15 million to support crucial EV parts manufacturing, creating over 100 skilled positions. DRIVE35’s wide eligibility criteria will benefit both small innovators and established automotive firms.
The programme is structured around three core pillars: Transformation, Scale Up, and Innovation. Under these, new competitions will be launched to support capital investments, feasibility studies, and collaborative R&D projects. The aim is to scale innovative ideas, support demonstrator projects, and create a robust pipeline of industry-ready solutions.
As part of this strategy, the UK Government has recently committed £70 million in R&D grants supporting more than 50 automotive innovation projects. With matched industry funding, this represents a total of £140 million in R&D investment targeting batteries, lightweighting, power electronics, and energy storage technologies. Participating companies include leading automotive firms such as Mercedes and Jaguar Land Rover (JLR).
The DRIVE35 programme will be jointly delivered by the Department for Business and Trade (DBT), the Advanced Propulsion Centre UK (APC), and Innovate UK, cementing a coordinated national effort to advance the UK’s automotive sector and secure its position in the global zero-emission economy.
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