DRIVE35 Scale-up Fund Drawdown 5

Overview

The DRIVE35 Scale-up Fund provides up to £150 million to help UK businesses develop and scale manufacturing capability for zero emission vehicle technologies.

Delivered by Innovate UK and the Advanced Propulsion Centre as part of the Department for Business, Innovation, Science and Trade-led DRIVE35 programme, the competition is aimed at businesses moving towards pilot or demonstration-scale manufacturing.

Projects should help validate both manufacturing capability and commercial viability, with the intention of supporting market entry at the target production volume. Applicants must also demonstrate why public funding is required and show that the grant will unlock substantial private investment.

The funding supports the wider DRIVE35 objective of strengthening the UK's automotive supply chain and expanding domestic capability in strategically important zero emission vehicle technologies.

Scope

Projects must support the growth, transition and resilience of the UK automotive supply chain while improving manufacturing capability, productivity, efficiency and competitiveness.

They must align with UK strategic priorities, including the Industrial Strategy and relevant Automotive Council technology roadmaps.

Projects must focus on scaling manufacturing capability at pilot or demonstration scale. This can include creating or converting manufacturing facilities, developing production processes and validating manufacturing systems before wider commercial production.

Supported activity can include:

• manufacturing facility and process planning
• site selection and engineering
• fabrication and construction work
• production equipment design, procurement and integration
• equipment installation and commissioning
• manufacturing process development
• quality control and quality assurance systems
• Advanced Product Quality Planning activities
• implementation of technologies that improve manufacturing efficiency
• staff training
• product development required for design for manufacture, where this accounts for no more than 50% of eligible project costs
• development of UK supply chains for the target production scale
• testing, validation and verification of components and systems produced through the scale-up project
• market engagement and feedback
• limited commercial activity where it supports research, development, innovation, verification or validation

Projects can support either pilot-scale manufacturing, where processes are developed under real-world conditions while retaining significant flexibility, or demonstration-scale manufacturing that more closely represents repeatable medium-volume production.

Projects must set out a credible route into relevant vehicle supply chains and explain how target customers will be involved during delivery. Applicants must also demonstrate how feedback from these customers will support successful commercial outcomes.

The grant is intended to unlock significant additional private investment. Applicants must demonstrate private co-investment of at least twice the value of the grant request. For example, a £5 million grant request would need to unlock at least £10 million of private investment. Other government grants cannot count towards this co-investment.

Key themes and topics

Projects must focus on manufacturing development for strategically important on-vehicle technologies in one or more of the following areas:

• electrical energy storage, including batteries, supercapacitors, components, management systems and integrated systems
• electric machines and associated driveline technologies
• power electronics, including Vehicle to Everything (V2X)
• internal combustion engines for off-road applications where the project supports transition to zero emissions using non-fossil fuels
• lightweight materials and associated manufacturing processes
• fuel cell systems and associated balance of plant
• hydrogen storage and management systems
• zero emission vehicle assembly

Projects can also include relevant upstream supply-chain activity such as raw materials, component manufacturing and subassembly manufacturing.

Circularity projects can be supported where manufacturing systems enable disassembly, remanufacturing, materials recovery or reuse.

Manufacturing improvements can also incorporate:

• digital transformation, including AI, digital twins and Internet of Things technologies within manufacturing
• manufacturing process decarbonisation
• renewable energy integration
• reduced manufacturing energy consumption
• lean manufacturing
• advanced automation

Target markets can include both on-highway vehicles, such as cars, vans, buses, coaches, trucks and motorcycles, and off-highway vehicles or Non-Road Mobile Machinery used in sectors such as construction, agriculture and mining.

The competition will not fund projects primarily focused on:

• technologies outside manufacturing process and asset development
• projects without a credible route into the zero emission vehicle supply chain
• small personal mobility applications such as e-scooters and e-bikes
• technologies that are too immature to scale in response to market demand
• fossil-fuelled internal combustion engine technologies
• fuel retail or wholesale supply
• development or production of low-carbon fuels
• hydrogen production
• off-vehicle charging infrastructure
• energy retail or wholesale supply
• projects primarily developing digital or data technologies
• speculative site-enabling projects

Projects must lead to significant business or production scale-up and expansion.

Project duration

12 to 34 months

Must start from 1 June 2027

End by 31 March 2030

Award value

Grant funding request between £2.5 million and £20 million

Total eligible project costs must be at least £5 million.

Funding rates

For eligible project costs, organisations can receive funding of:

• up to 50% if they are a micro, small or medium-sized organisation
• up to 30% if they are a large business

The remaining eligible project costs must be funded by the organisation receiving the grant.

Each participant receiving grant funding must also pay an industrial contribution equivalent to 3.5% of each grant payment to the Advanced Propulsion Centre operating budget. This contribution cannot be included as an eligible project cost.

Eligibility criteria

• Projects can be delivered by a single applicant or a consortium and must be lead by a UK-registered business of any size
• Collaborators can include UK-registered businesses, academic institutions, charities, not-for-profit organisations, public sector organisations and research and technology organisations
• Subcontractors must be preferably UK-based with fully justified and appropriate costs
• All funded project work must be carried out within the UK and must intend to exploit the results from or in the UK
• Subsidy control and state aid rules apply

Following a grant offer, successful applicants can have up to nine months to raise the required co-investment before starting the project. Extensions may be available in defined circumstances.