UK automotive companies are set to benefit from £2.5bn from the UK Government over the next decade to support thousands of jobs and help ensure the UK remains at the forefront of zero-emission vehicle development.
The government has announced the launch of DRIVE35, comprising new and improved funding competitions to support UK businesses.
The programme is set to fund a wide spectrum of projects which help the transition to zero-emission vehicle manufacturing – targeting established high-volume manufacturing and multibillion-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 £2bn in funding to 2030 alongside an additional £500m for research and development to 2035.
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.”
The automotive sector contributed £21.4bn in GVA to the economy in 2024 and currently employs 132,000 people across all parts of the UK.
The UK was also the largest EV market in Europe in 2024 and the third in the world with more than 382,000 EVs sold – up a fifth on the previous year. There are now more than 82,000 public chargepoints in the UK.
DRIVE35 aims to build on the previous 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 more than £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.
Bolton is set to benefit from more than £100m in investment from Astemo Ltd, to support the production of electric vehicle (EV) components in the UK. This investment will produce new generations of electric inverters, supporting more than 220 direct high-value jobs in the region and hundreds more in the wider UK supply chain.
The West Midlands has also benefitted from a £15m investment from Dana to produce parts for EV manufacturing. Dana’s investment will ensure skilled jobs in the region, supporting more than 100 direct jobs over the long term.
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.”
