Sharing insights from our internal “Grant Spotlight” weekly R&D Grant Funding meeting
Drive 35 is the UK government’s new £2.5 billion funding programme for the automotive sector, replacing the former Automotive Transformation Fund. It exists to help build a globally competitive electric vehicle supply chain and support UK manufacturing, with targets for a third of new cars sold to be electric by 2035. If your organisation is developing zero emission vehicle technology, manufacturing processes, or related infrastructure, this programme deserves a close look.
What’s on offer
Under Drive 35 sit three innovation strands, Collaborate, Demonstrate and Mobilise, plus a separate Scale Up Fund. Each targets a different stage of technology maturity, from early stage ideas through to capital intensive manufacturing.
Demonstrate Fund
A smaller scale route for earlier stage innovation, open to businesses of any size and funded at 70% (30% match funding). A 3.5% industrial contribution is payable to APC. The most recent competition closed in March 2026, with a further round expected under the Drive 35 banner.
Collaborate Fund
For later stage, close to market technologies. Grants range from £2.5 million to £20 million, aimed at organisations with the capital and infrastructure to invest upfront, since projects are match funded at 50%. Any size business can lead, working alongside academic partners where relevant, though academic institutions cannot lead or apply alone.
Mobilise
An early stage accelerator combining grant funding, up to £173,500, with coaching and network access. Details are limited for now, but it’s expected to reopen next year and looks geared towards building investment ready partnerships.
The Scale Up Fund
Sitting outside the innovation strands, this fund supports capital intensive manufacturing rather than R&D itself, covering upstream supply chain development, circular design for disassembly, and technology deployment. Grants run from £2.5 million upward, with a smaller feasibility study route also available, worth £150,000 to £750,000, match funded at 50 or 60% depending on company size, over a nine month project reaching Technology Readiness Level 5.
Who should apply
This programme suits UK businesses across the automotive supply chain, from component manufacturers to software and connectivity specialists working on vehicle to everything technology. Given the broader eligibility criteria compared to previous rounds, it’s worth a look even if your work isn’t purely vehicle focused. For example, advanced materials and battery development would be considered eligible.
Getting it right
One area worth clarifying early: match funding refers to the private contribution needed to reach 100% of project costs, not the grant rate itself. Get this wrong in your planning and your numbers won’t stack up.
Next steps
With multiple routes live or reopening across 2026, timing your application to the right strand matters. Get in touch with our team to talk through where your project fits and how best to build a competitive case.
Mareike Chalkley
Complemented by my 15+ years experience in founding, building and managing R&D funding consultancies in the UK and Germany, I take much personal satisfaction from supporting R&D projects that can achieve tangible, positive impact for stakeholders across social, economic and ecologic dimensions.
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