UK Commits £2.5 Billion to DRIVE35 R&D Funding for Zero-Emission Vehicle Development

The UK government has launched a £2.5 billion funding program called DRIVE35, aiming to support the development of zero-emission vehicles over the next decade. The program will fund projects across the automotive sector, from established manufacturers to start-ups, and will provide certainty to the sector, giving innovators the confidence to invest in the UK. The funding will unlock capital investment in zero-emission vehicles, batteries, and their supply chains, and is expected to support thousands of jobs and secure the future of the sector.

The UK government has announced a £2.5 billion funding programme, DRIVE35, aimed at supporting the development of zero-emission vehicles over the next decade. The programme, part of the UK’s modern Industrial Strategy, will fund a wide range of projects across the automotive sector, from established manufacturers to start-ups.

DRIVE35 is designed to provide certainty to the sector and give innovators the confidence to invest in the UK. The funding will unlock capital investment in zero-emission vehicles, batteries, and their supply chains, supporting thousands of jobs and securing the future of the sector. The programme will be delivered by the Department for Business and Trade in partnership with the Advanced Propulsion Centre UK and Innovate UK.

The funding will be provided through three pillars: Transformation, Scale Up, and Innovation. The Transformation pillar will support large-scale capital investments, while the Scale Up pillar will fund feasibility studies to help businesses scale up. The Innovation pillar will support early-stage and late-stage R&D projects involving innovative technologies and processes.

The programme will also include specific investments for UK automotive manufacturing firms and projects, with over £300 million announced for capital investment, R&D, and the Connected & Automated Mobility (CAM) Pathfinder programme.

The UK auto sector contributed £21.4 billion in GVA to the economy in 2024 and currently employs 132,000 people. The transition to zero emissions is seen as a significant opportunity to attract investment, harness British innovation, and deliver growth for generations to come. The UK was the largest EV market in Europe in 2024 and the third in the world, with over 382,000 EVs sold.

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."

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

The programme will be launched with competitions across the three pillars, including the Automotive Transformation Fund, Scale Up Feasibility Studies, and Innovation competitions.

References:
[1] https://www.gov.uk/government/news/backing-british-industry-government-launches-25bn-drive35-programme-to-power-uk-auto-investment-and-jobs