The government has launched DRIVE35, which will initiate funding competitions to drive UK industry and research, particularly the transition to zero-emission vehicle manufacturing. Auto firms will be able to 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 new programme, part of the UK’s Industrial Strategy, was announced in the Advanced Manufacturing Sector Plan, and will commit £2 billion in funding to 2030 alongside an additional £500 million for research and development to 2035: a team-year commitment to UK automotive innovation.

The automotive industry is incredibly lucrative, contributing £21.4 billion in GVA to the economy in 2024 and employing 132,000 people across all parts of the UK at different levels. 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.

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 jobs, stimulate billions in economic growth and investment, and cut millions of tonnes of CO2 emissions.

Three streamlined pillars will assist investors in finding the right projects to invest in: transformation, scale up and innovation.

Combined with industry funding, this totals £140 million in new investment for UK R&D, with projects supporting technologies like batteries, energy storage, light weighting and power electronics.

The Department for Business and Trade has also confirmed over £300 million for specific UK automotive manufacturing firms and projects, including £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 £150 million Connected and Automated Mobility (CAM) Pathfinder programme.

Bolton will receive over £100 million in investment from Astemo Ltd, which will be vital to the production of electric vehicle (EV) components in the UK, with the West Midlands to receive £15 million from Dana to produce essential parts for EV manufacturing. Both of these will support several hundreds jobs combined.

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 et 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 manufactures, 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.”