DRIVE35 is the UK government’s grant programme for automotive manufacturing and research, worth £4 billion to 2035 as of November 2026. It gathers capital and R&D support for zero emission vehicle production and supply chains, which used to arrive through separate funds, into three pillars delivered by the government’s business department with the Advanced Propulsion Centre (APC) and Innovate UK.
This explainer sets out how the programme grew from its July 2025 launch, what each pillar funds, how suppliers apply and how it relates to the Automotive Transformation Fund. It is written for manufacturers, tier suppliers and technology developers deciding whether a project fits and when to approach the delivery team.
Where DRIVE35 came from and how big it is
The Department for Business and Trade announced the programme on 13 July 2025 in the Advanced Manufacturing Sector Plan, part of the modern Industrial Strategy. The launch package was £2.5 billion: £2 billion of capital and R&D funding to 2030 plus £500 million of R&D funding to 2035. The first competitions opened on 14 July 2025. Innovate UK Business Connect gives the name in full as Driving Research and Investment in Vehicle Electrification.
The budget grew at Autumn Budget 2025. On 27 November 2025 the APC welcomed an additional £1.5 billion, taking the total to £4 billion, and GOV.UK guidance was updated to the new figure on 10 August 2026. The official funding page describes grants open to UK registered businesses of any size, including collaborations.
The summary business case, published on 15 December 2025, explains governance. The department’s Automotive Unit leads and delivers capital grants directly, while the APC and Innovate UK deliver R&D funding. That document describes the £2.5 billion version, with 75 percent going to capital grants and 25 percent to R&D, and does not show how the extra £1.5 billion is split.
The department’s name has also changed. After machinery of government changes reported on 21 July 2026, announcements from August 2026 carry the name Department for Business, Innovation, Science and Trade.
The three pillars at a glance
Each pillar has its own competitions, and the amount available varies by stream. The table reflects GOV.UK and APC pages as published in November 2026.
| Pillar | What it funds | Competitions |
|---|---|---|
| Transformation | Capital grants for large investments in zero emission vehicle manufacturing and supply chains | Automotive Transformation Fund |
| Scale-up | R&D grants to take near-commercial technology to pilot or demonstration scale production | Feasibility Studies (closed), Scale-up Fund |
| Innovation | R&D grants for product and process development, plus SME support | Collaborate, Demonstrate, Mobilise |
Transformation
The Transformation pillar is capital only. Its scope covers vehicle assembly, new or upgraded plants, batteries including gigafactories, electric motors and drives, power electronics, fuel cells, upstream supply chain and recycling. Expressions of interest are assessed every two months on a rolling basis. Supply chain projects go through the APC, while vehicle assembly projects deal with the department directly. The department aims to respond within 60 working days of finishing its assessment, and ministers take the final decision. No minimum project size or intervention rate is published.
Scale-up
The Scale-up guidance records that Feasibility Studies closed and the Scale-up Fund opened on 29 September 2025, offering a share of up to £150 million. The APC Scale-up Fund page sets grants at £2.5 million to £20 million, covering capital alongside other R&D costs. Eligible costs are funded at up to 50 percent for micro, small and medium organisations and up to 30 percent for large ones. Private investment must reach at least twice the grant, and projects must end by 31 March 2030.
Innovation
The Innovation pillar covers energy storage, electric machines, power electronics, lightweight materials, fuel cells and hydrogen storage, plus software-defined vehicles and new electrical and electronic architectures. Combustion engine projects qualify only under emissions and fuel conditions. It has three strands:
- Collaborate: consortium projects requesting £2.5 million to £20 million, at least 50 percent match funded, delivered in 18 to 36 months and reaching TRL7 to 8 or MRL6 to 7. The APC lists the next window as 20 January 2027 to 7 April 2027.
- Demonstrate: single or joint projects with grants of £500,000 to £1.5 million, at least 50 percent match funded, delivered in 9 to 12 months and reaching TRL5 to 6 or MRL4 to 5, with an in-person interview. The APC lists January 2027 for the next opening.
- Mobilise: a 12-month accelerator for SMEs, start-ups and spinouts in zero emission and connected and automated mobility technology, with grants of up to £180,000 plus mentoring. It was closed when the APC page was last updated on 26 October 2026.
How DRIVE35 relates to the Automotive Transformation Fund
The Automotive Transformation Fund (ATF) predates the programme. It was launched on 14 July 2020 with up to £1 billion, run jointly by the APC, Innovate UK and the then business and trade departments, and focused on batteries, motors and drives, power electronics, fuel cells and recycling.
The ATF name now survives as the capital fund inside the Transformation pillar, with what the July 2025 announcement called a wider technology scope. That announcement credited earlier ATF and APC competitions with leveraging more than £6 billion of private investment, and the business case says the new structure consolidates that support into three pillars.
For suppliers, the practical change is a clearer sequence. GOV.UK states that support spans technology readiness levels 3 to 9, so a technology can in principle move from Demonstrate or Collaborate, through the Scale-up Fund, to a capital bid within one programme. Each step remains a separate competitive decision.
What the August 2026 DRIVE35 awards show
On 10 August 2026 the government announced nearly £130 million of investment including industry contributions, with almost £65 million from government. That combined nearly £50 million of R&D awards with £17 million for nine projects under CAM Pathfinder, a separate self-driving programme.
The APC breakdown listed 33 projects: 16 Mobilise businesses sharing more than £2.7 million, two Collaborate projects with more than £8 million, ten Demonstrate projects with £9 million and five Scale-up Fund projects with £26.9 million. Five scale-up projects took more than half the round’s grant value, while early-stage strands spread smaller sums across many businesses.
How suppliers should prepare
Most of the work happens before a form is opened:
- Place the project on the readiness scale. Each strand has a TRL or MRL target, so an honest starting point decides which competition is realistic.
- Secure match funding early. The 50 percent match for Collaborate and Demonstrate, and the private investment ratio for the Scale-up Fund, need board approval before submission.
- Talk to the APC first. Its pages advise contacting the team before applying, and supply chain capital bids start with an expression of interest.
- Build the value for money case. The department runs its own value for money assessment on Innovation projects, so jobs, UK exploitation and carbon evidence should be ready. A plant retrofit investment case written for the board can often be adapted.
- Allow for decision time. All grants are subject to government approval, and capital decisions sit with ministers.
For example, a tier two maker of power electronics enclosures planning an automated line might prove a process in Demonstrate, then approach the Scale-up Fund once customer volumes are clearer. Whether to commit capital at all is covered in our piece on supplier resilience and investment decisions.
Key points for automotive suppliers and manufacturers
- DRIVE35 is a £4 billion grant programme to 2035, up from £2.5 billion at launch after an extra £1.5 billion at Autumn Budget 2025.
- Transformation offers capital grants through the Automotive Transformation Fund, with rolling expressions of interest.
- Scale-up and Innovation offer R&D grants through competitions with fixed windows, grant bands and match funding rules.
- Competition dates move, so add the APC funding pages to a policy watchlist before planning a bid.
- This article is general information, not tax, legal or financial advice.
Sources
- GOV.UK: Backing British industry: government launches £2.5bn DRIVE35 programme
- GOV.UK: DRIVE35 Funding Programme
- GOV.UK: Apply for automotive funding via the DRIVE35 programme
- GOV.UK: DRIVE35 Funding Programme: Transformation
- GOV.UK: DRIVE35 Funding Programme: Scale-Up
- GOV.UK: DRIVE35 Funding Programme: Innovation
- GOV.UK: DRIVE35 summary business case
- GOV.UK: £130 million for cutting-edge next generation vehicles
- Advanced Propulsion Centre UK: APC praises the government’s increased commitment to zero-emission technology investment
- Advanced Propulsion Centre UK: More than £47 million government funding invested in UK’s automotive future
- Advanced Propulsion Centre UK: DRIVE35 Scale-up Fund
- Advanced Propulsion Centre UK: DRIVE35 Collaborate
- Advanced Propulsion Centre UK: DRIVE35 Demonstrate
- Advanced Propulsion Centre UK: DRIVE35 Mobilise
- Innovate UK Business Connect: DRIVE35, Driving Research and Investment in Vehicle Electrification
- Zemo Partnership: £1bn Automotive Transformation Fund to help move UK auto sector to zero emissions
- LexisNexis: Machinery of government changes rename business, science, innovation and digital departments
Sources checked in November 2026. Rules, rates and schemes can change after publication, so check the linked official pages before acting.
