£470 million government support package for automotive industry
Date: 09 April 2026
- Department for Business and Trade confirms Automotive Transformation Fund investment in Somerset gigafactory
- DRIVE35 Collaborate, Demonstrate, Scale-up Fund and Scale-up Feasibility Study winners revealed
- Including big-name manufacturers to scale up SMEs across the UK
The Advanced Propulsion Centre UK (APC) has announced the latest government-backed projects under the DRIVE35 programme. It is a package of over £470 million in grants to support the UK automotive industry.
Including substantial UK government support of around £380 million for Agratas, part of the Tata Group and parent company of JLR. Agratas combines pioneering research, world-class engineering, and sustainable design to deliver high-performance battery solutions.
This investment is provided through the Department for Business and Trade’s DRIVE35 Automotive Transformation Fund (ATF), facilitated by the APC. It represents another vital milestone in the UK’s transition to zero-emission vehicles.
Julian Hetherington, Automotive Transformation Director at the APC, said:
“This globally significant investment by Agratas reinforces the UK’s accelerating position in pursuit of road transport decarbonisation through the production of vital high-performance batteries for electrified vehicles.”
“I’m delighted that the ATF has been able to support Agratas in their investment in new facilities, creating secure and highly skilled jobs in this area and across the supply chain.”
Delivered by the Department for Business and Trade in partnership with the APC and Innovate UK, the DRIVE35 programme supports innovation, scale-up, and industrial transformation within the automotive sector. Grant awards are paired with private industry investment and will accelerate the development of next-generation zero-emission vehicle technologies and supply chains across the UK.
Minister for Industry Chris McDonald said:
“Our Modern Industrial Strategy is central to this government’s growth mission, and by funding our automotive sector, we are creating the right conditions for increased investment, economic growth, and jobs across the country.
“I want to congratulate all the winners on their success as we continue to support key projects that bring the latest R&D for cutting-edge technologies, accelerate commercial scale-up, and attract investment in zero-emission vehicles, batteries, and their supply chains.”
Other government grant awards unveiled today span four DRIVE35 competition streams and together represent £89.8 million in government funding. They are Collaborate, Demonstrate, Scale-up Fund, and Scale-up Feasibility Studies. They aim to boost domestic manufacturing, grow industrial capability, and strengthen sovereign supply chains across the country.
Ian Constance, CEO, APC, said:
“The projects announced today demonstrate the UK’s determination to lead the shift to zero-emission mobility. By facilitating the UK Government’s DRIVE35 grants, we are turning world-class innovation into industrial capability. With our partners in DBT and Innovate UK, we are backing manufacturers, empowering SMEs, and strengthening the UK’s sovereign supply chain.
This multi-million-pound support package is more than an investment in technology; it is an investment in the people, skills, and companies that will define the future of clean transport. Together, we are building the foundations of a competitive, resilient, and sustainable automotive industry.”
The Automotive Transformation Fund (ATF) has the purpose of providing capital funding to support the industrialisation of zero-emission vehicle technologies.
Its goal is to safeguard and create highly skilled jobs, attract private investment, and drive emissions reductions, whilst securing future zero-emission vehicle manufacture in the UK by building an internationally competitive EV supply chain through the transition, upgrading, or establishment of new manufacturing facilities.
The programme aims to develop a UK-based manufacturing capability for zero-emission vehicles and leverage the UK’s unique reputation in high-growth domestic and export markets. More details on the Agratas funding award can be found here.
Collaborate provides match-funded grants to a consortium of partners, supporting the design, development, and delivery of strategic zero-emission vehicle technologies. Combining both government and industry funding a total of over £84 million is being invested through consortia that involve vehicle manufacturers in the UK – including JLR, ELM Mobility, Maeving, and Nissan. While Hypromag leads a group recycling magnets for electric motors. Successful applicant details can be found here.
The Demonstrate competition aims to accelerate R&D programmes by building a product or process demonstrator in under 12 months. Eighteen projects are underway, totalling more than £29 million, including over £14 million in government grants. These initiatives span technology for advanced battery systems, powertrains, lightweight cars, and the recycling of critical materials. Successful applicant details can be found here.
Scale-up Feasibility Studies support companies in assessing the business and investment case for a manufacturing project at pilot, demonstration, or full industrial scale. Two rounds of this competition have been announced today. These include advancements in battery material production, EV power electronics, transport refrigeration, cold chain solutions, aluminium recycling, cathode manufacturing, lithium extraction, and next-generation brake systems. Successful applicant details can be found here.
The Scale-Up Fund is designed to bridge the gap between innovation and transformation. This critical phase of product or process development is filled with inherent risk and often referred to as the “Valley of Death” by businesses large and small. It requires significant amounts of investment to ensure an already successfully validated business plan becomes a reality. Two large-scale manufacturing projects have now progressed to a Scale-up Fund grant and secured £22 million in government support, Altilium and Surface Transforms – successful applicant details can be found here.
Contact APC for details about DRIVE35 and the funding opportunities open to a wide range of UK-based automotive organisations.
Grant funding is provided by the UK Government.