The UK government has unveiled DRIVE35, a new £2.5 billion programme over the next decade designed to support the UK automotive industry’s transition to zero-emission vehicle manufacturing. Announced on 13th July 2025 as part of the UK’s modern Industrial Strategy, this initiative commits £2 billion in funding until 2030, with an additional £500 million for research and development (R&D) extending to 2035.
DRIVE35 aims to provide financial certainty and encourage investment across the sector, from established high-volume manufacturers and large-scale gigafactories to start-ups and cutting-edge innovations in batteries and their supply chains. The automotive sector, which contributed £21.4 billion in Gross Value Added (GVA) to the economy in 2024 and employs 132,000 people, views the shift to zero emissions as a significant opportunity for growth and job creation.
Business and Trade Secretary Jonathan Reynolds stated that the government is working to establish a globally competitive electric vehicle (EV) supply chain, highlighting recent measures such as a trade deal with the US, efforts to lower electricity prices, and updates to the ZEV mandate. He underscored that funding the automotive sector is a key priority for economic growth across the UK.
DRIVE35 builds on the successes of previous initiatives like the Automotive Transformation Fund (ATF) and the Advanced Propulsion Centre UK (APC) R&D competitions, which collectively leveraged over £6 billion in private sector investment. As part of this launch, over £300 million has been announced for specific UK automotive manufacturing firms and projects. This includes over £100 million for Astemo Ltd. in Bolton for EV component production, supporting over 220 direct jobs, and £15 million for Dana in the West Midlands for EV parts, securing over 100 jobs.
Mike Hawes, SMMT Chief Executive, welcomed the dedicated programme, emphasising its potential to unlock investment and innovation, provided it is implemented rapidly and supported by a long-term, cross-government strategy. Ian Constance, CEO of APC UK and Zenzic, noted that the investment underlines the government’s commitment to advanced manufacturing, supporting innovation, scale-up, and transformation across the industry.
The DRIVE35 programme will offer funding across three pillars: Transformation, Scale Up, and Innovation, with specific competitions opening shortly.
Source: Gov.uk