Government announces £2.5bn funding package to boost UK EV production

The Government has announced a £2.5 billion spending package for the UK automotive industry to boost zero-emission vehicle production over the next decade.

The DRIVE35 programme will fund a wide spectrum of projects designed to help the transition to zero-emission vehicle manufacturing - targeting established high-volume manufacturing and multi-billion-pound gigafactories, all the way to start-ups, prototypes and cutting-edge automotive innovation.  

It 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, signalling a ten-year commitment to UK automotive innovation.

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."

DRIVE35 will build on previous successes with the Automotive Transformation Fund (ATF) and the Advanced Propulsion Centre UK (APC) R&D competitions, which between them leveraged over £6 billion of investment from the private sector, creating thousands of jobs across the UK economy.

In its recent spending review the Government outlined a committed to spending £2.6 billion to decarbonise transport over the next three years. The £2.6bn includes £1.4bn to support the continued uptake of electric vehicles, including zero-emission vans and heavy goods vehicles (HGVs).