Nearly £130m of government and industry investment is being committed to next-generation vehicle technologies in the UK, with the programme expected to support more than 1,800 manufacturing jobs and further employment across automotive supply chains.
Almost £65m of public funding will be matched by industry, backing projects spanning zero-emission vehicles, connected and automated mobility, and technologies intended to move from research and development towards commercial production.
Nearly £50m of government funding has been awarded to automotive companies and research partners working on zero-emission technologies. A further £17m is being directed into nine projects under the Connected and Automated Mobility Pathfinder programme, covering sensors, brake-by-wire systems, artificial-intelligence simulation, public transport, construction, airport operations, and highways maintenance.
The awards form part of DRIVE35, the government programme designed to support the transition of the UK automotive industry towards electric and zero-emission production. DRIVE35 has been allocated £4bn to 2035 and is intended to support battery manufacturing, vehicle technology businesses, and domestic supply chain capability.
The latest funding includes projects in established automotive regions including the North East and West Midlands, with Turntide Technologies and Bentley among the businesses identified as beneficiaries. More than £100m of DRIVE35 grant funding had already been allocated to supply chain businesses in the two regions before the latest awards.
Industry Minister Blair McDougall said the investment would “secure skilled jobs, strengthen our manufacturing heartlands and help drive the reindustrialisation of Britain.”
The employment numbers sit within a larger industrial contest over where the value created by vehicle electrification will ultimately be captured. As manufacturers shift away from combustion-engine platforms, spending is moving into batteries, software, power electronics, semiconductor systems, sensors, and specialised production processes.
That transition is widening the group of companies exposed to automotive investment decisions. Vehicle makers increasingly rely on suppliers with expertise that would previously have sat outside the traditional automotive manufacturing base, while governments are competing to secure new factories, engineering centres, and research programmes.
Public support is particularly important around the point where technology moves from prototype development into commercial production. Suppliers need sufficient certainty over potential demand before investing in specialist equipment, tooling, and skills. Manufacturers, in turn, need evidence that components can be produced reliably, economically, and at the required scale.
Without that bridge, technologies developed in the UK can still be manufactured elsewhere once they reach volume production. DRIVE35 is intended to increase the likelihood that more of the engineering and production value remains within the domestic economy.
Connected and automated mobility adds another strand to that strategy. Government estimates based on Society of Motor Manufacturers and Traders analysis suggest the sector could contribute around £66bn to the economy by 2040 and support tens of thousands of jobs.
The nine Pathfinder projects are intended to test technologies in operational environments rather than restrict development to laboratories or controlled trials. Their applications range from automated public transport and construction equipment to airport operations and road maintenance, giving the programme a broader industrial footprint than passenger vehicles alone.
The investment cycle in advanced manufacturing also raises the stakes around timing. Automotive plants, tooling, testing facilities, and specialist supply chains require substantial capital and are difficult to relocate once established, but decisions on where future models and components will be produced are usually made years before vehicles reach the market.
That makes early-stage engineering capability, infrastructure, skills, energy costs, and supplier readiness part of the same investment decision. A country can have strong research capability yet lose later-stage manufacturing if companies cannot see a credible route to scale.
DRIVE35 is ultimately intended to support more than 50,000 direct jobs, alongside additional supply chain employment, and to unlock private investment through to 2035. The latest £130m package represents only part of that programme, but directs capital towards projects approaching the point where technical development must become repeatable commercial production.
The next test will be whether those projects generate follow-on investment from manufacturers and suppliers. Funding can reduce the risk attached to early deployment, but sustained industrial value will depend on companies committing further capital once the technologies have demonstrated that they can be built competitively in the UK.
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