Julian Hetherington, Transformation Director at the Advanced Propulsion Centre UK (APC), considers the UK government’s new funding initiatives, and their potential to accelerate research and support industry innovation.
The Department for Business and Trade recently announced new funding initiatives, Driving Research and Investment in Vehicle Electrification (DRIVE35) and the Connected Automated Mobility (CAM) Pathfinder programme. Both are part of the government’s Advanced Manufacturing Sector Plan and the UK’s Modern Industrial Strategy, to ensure innovation in the sector not only continues but accelerates.
Simpler and easier to access
DRIVE35 completely reinvents the existing funding ecosystem. The funding journey has never been well-defined or easy to access. Although a new programme, it is built on a legacy of experience and consultation with industry. The ultimate goal is to maintain and grow vehicle manufacturing in the UK, safeguard highly skilled jobs, support innovation, and establish a UK-based, world-leading, globally competitive supply chain for zero-emission technologies, encouraging direct investment and generating significant export revenue.
Transition to zero emissions
With a broader scope, this revised funding stream provides more support than ever. The APC has played an integral role in shaping DRIVE35, identifying mechanisms to support businesses at all stages, through its structured Innovation, Scale-Up, and Transformation programmes. All the new programmes are designed to accelerate the industry’s transition to a world where we are producing more zero-emission vehicles and fully decarbonising on-road and off-highway transport.
The transition to zero emissions is arguably both the biggest challenge and opportunity of the 21st century.
The UK has a strong manufacturing base, academic community, and entrepreneurial spirit that can help it develop global, leading innovations in electric vehicle batteries, powertrains, systems, and software. Having a clear commitment to funding is important. It means that we can fund longer-term projects, which are the ones that will ultimately be the most impactful.
At the APC, we understand the unique challenges the UK faces and have worked with the government to shape DRIVE35 into a mechanism to increase the UK’s ability to compete globally and sustain itself.
Driving research and investment in vehicle electrification
DRIVE35 is a ten-year, £2.5bn programme that will support zero-emission vehicle projects in the UK. The decade-long programme aims to accelerate the transition to sustainable transport and safeguard jobs. The Government is making a big and bold commitment to secure the UK’s place at the forefront of zero-emission vehicle development and forms a substantial part of the wider commitment to the UK’s ‘Modern Industrial Strategy’, which was published in June 2025. This strategy focuses on the high growth potential and strategic importance of Advanced Manufacturing, of which Automotive forms a large part.
Following the success of the funding programmes facilitated by the APC since 2013, this long-term commitment provides security for manufacturers, innovators, and industry. It enables the same long-term support and funding, but with a focus that is based on today’s context and today’s industry needs.
DRIVE35 offers a range of entry points to companies of all sizes, but the criteria differ across the funding streams. It is important that businesses have an awareness of their present stage and future plans before applying.
We start by asking where companies are in that commercial journey. We can provide support all the way from proof of concept right through to industrialisation at scale and in quantum, but we need to know at what stage the business is.
Three funding objectives
The DRIVE 35 programme has three funding objectives: supporting innovation; accelerating scale-up; and enabling transformation. These broad objectives enable a great degree of freedom in the type, size, scale, and focus of projects. As well as funding, successful applicants will receive expert support from the APC and other partners.
DRIVE35 provides specific funding and support for businesses at both ends of the spectrum – from start-up to global scale. For the first time, the funding will also support small businesses in connected and automated mobility (CAM) development.
Supporting innovation
This objective is focused on delivering SME growth and late-stage R&D projects. Under this funding pillar, there are three competitions, and the journey starts with Mobilise.
Mobilise is unique in the funding ecosystem in that it does not just focus on technology validation; its core purpose is to mentor organisations to ensure they are investment and market-ready. Aimed at SMEs, start-ups, spinouts, and even more mature organisations with early-stage R&D projects, successful companies work with a carefully curated team of experts to help navigate obstacles to success, such as perceived market knowledge, business planning gaps, IP, certification, and more.
Mobilise is the successor to the APC’s award-winning Technology Development Accelerator Programme (TDAP), its reach is now extended to companies operating in the connected and automated mobility (CAM) space, and it combines the mentoring elements of TDAP with the technical validation opportunities provided by the APC’s sister organisation Zenzic through the CAM Testbed UK’s extensive network of world-leading testing facilities.
This vital programme builds the bridge between developing a business concept and getting it to a stage where companies can secure external finance. The money the APC provides is vital, but it is the support through coaching, consultancy, and building commercial relationships that can be transformative.
This package of support has been hugely successful in helping small businesses go through the programme and subsequently raise the further finance they need to expand and continue through the funding model.
Once a concept is proven and an initial investment is achieved, the next vital stage is to develop a demonstrator, a working prototype to support further validation and investment.
The Demonstrate programme enables companies to accelerate their R&D programme by building a product or process demonstrator in under 12 months to showcase at Cenex Expo.
It’s often the springboard to further funding opportunities, as can be exemplified by Wrightbus, which showcased a hydrogen fuel-cell single-decker bus back in 2021, only to receive Collaborate funding, which culminated this year in the launch of the world’s first hydrogen double-decker bus, a commercial success for Wrightbus.
The next step on the journey is Collaborate, which provides match-funded grants to a consortium of partners formed across industry and academia to support the design, development, and delivery of strategic ZEV technologies. Funding is on a much larger scale, as the goal of the programme is to reach commercial readiness.
The purpose is to advance concepts from ‘post-proof of concept (generally TRL4/5) further towards commercial exploitation (i.e., advance one or more TRLs or MRLs from the entry point). These mid- to late-stage innovations need an additional push to take them to domestic production and potential export opportunities.
With a renewed focus on Software Defined Vehicles (SDVs), electronic architecture (EA), the circular economy, and manufacturing competitiveness, there has never been so much opportunity. At the top of the tree, the APC can provide substantial (£25m+) capital to secure investment in the UK. These projects are match-funded, with the APC facilitating 50% of the cost.
Traversing the Valley of Death
Accelerating scale-up is the next stage in the funding process, and its objective is to provide funding opportunities designed to support the rapid scale-up of pioneering technologies and achieve targeted production volumes at an accelerated pace. The starting point is Feasibility Studies, which enables companies to validate their business and investment case for a manufacturing project at pilot, demonstration, or full industrial scale.
These are not technical feasibility studies (i.e., proving technical concept through experiment), but rather they are commercial viability studies. A chance to test the market, assess the commercial feasibility of technologies and their growth potential before investing heavily in R&D, it is all about avoiding that Valley of Death.
Companies have a concept that they have demonstrated works, but they need to go and raise funding.
The APC puts each business through an assessment process to help them understand and quantify the value of their proposition. The purpose is to get them to a point where they can secure a grant from the government to fund their work via the Scale-up Fund. A great illustration of this would be a recent project undertaken with a company right at the start of the value chain.
Once validated, companies can step up to the Scale-up Fund, enabling investment into building a manufacturing facility or developing a specific process development at pilot-scale or demonstration-scale.
And so, we loop back to the Enabling Transformation objective, which supports large-scale capital investments in the UK, such as the Astemo and Dana UK Axle grants.
The Automotive Transformation Fund (ATF) sits under this funding pillar and aims to develop a UK-based zero-emission vehicle value chain and support the transition to a BEV future. Global businesses can secure substantial capital funding from the ATF to support large-scale industrialisation for production and supply chain solutions. Large capital projects – like the £50m invested in the Ford plant – are judged on different criteria. The intervention rates for ATF will vary depending on the needs of the individual project, circumstances, and risk profile.
To apply for funding through the ATF, you must be a UK-registered company and first complete an Expression of Interest (EOI).
The competition is for businesses that plan to carry out capital-focused investment projects that support the UK automotive industry. The EOI application enables businesses to assess their eligibility to progress to the next stage of the funding process. Unlike other funding streams, the ATF can be applied for at any time; there is no set opening window.
One size does not fit all
Whether it is feasibility studies or a collaborative R&D programme, there’s funding available. The APC typically receives a substantial number of applications, but companies have a good chance of securing funding with a strong proposal.
Whatever stage companies are at, there is a funding programme to suit. From start-up to concept, innovation to commercialisation, and onward to large-scale transformation, DRIVE35 offers more zero-emission funding opportunities than ever before.
This new programme means the future for UK automotive manufacturing and innovation is bright, with funding secured. The APC has managed a seamless transition from its previous incarnation to the present stage. For those interested, details of competitions and entry criteria are available online at www.apcuk.co.uk. As the UK enters an uncertain future, with a fragile economy and an unstable global environment, the work of the APC and its partners is more vital than ever before.
Funding through the APC has been really impactful in helping us stop the blood loss of innovative businesses in the UK, either going bust, licensing their IP, or selling out to a big company. We are giving owners and entrepreneurs the chance to grow their businesses with our support.
Through various funding mechanisms, the APC has supported every type of business, from start-ups, spinouts, and SMEs to global brands, like Cummins, Mercedes AMG, JLR, and Ford.
By supporting innovation, accelerating scale-ups, and enabling transformation, we can change lives. The key to our success is ensuring that we have a funding solution for all eventualities.
In the last ten years, technology, processes, and people may have changed, but this principle remains as strong as ever.
About the Advanced Propulsion Centre UK
The Advanced Propulsion Centre UK (APC) collaborates with the UK government, the automotive industry, and academia to facilitate driving research and investment in zero-emission vehicle manufacturing. Established in 2013 and jointly funded by the Department for Business and Trade (DBT and the automotive industry, the APC accelerates the technologies that support the transition to zero-emission vehicle manufacturing and towards a net-zero automotive supply chain in the UK.
With a proven track record, the APC has facilitated funding for 354 low-carbon and zero-emission projects involving 614 partners. Working with companies of all sizes, this funding, since 2013, is estimated to have helped create or safeguard over 59,000 jobs in the UK. The technologies and products are projected to save over 425 million tonnes of CO2.
The APC is committed to sustaining and enhancing the UK’s long-term automotive capabilities and investments through knowledge-sharing, collaboration, and innovation. Focus in the following three key areas – Innovation, Scale-up, and Transformation – is driving innovation and investment in a globally competitive zero-emission vehicle supply chain, and building a strong economy through the delivery of safer, smarter, more sustainable, and affordable mobility:
Innovation
Funding product and process innovation of strategic and disruptive technologies for zero-emission vehicles, including digital tools and AI-driven processes.
Scale-up
Accelerating manufacturing by catalysing investment in advanced technologies for zero-emission vehicles, scaling-up sustainable production processes.
Transformation
Driving capital investment in an internationally competitive EV supply chain and upgrading or establishing new plants, securing future zero-emission vehicle assembly in the UK.
For more information, go to apcuk.co.uk or follow us @theapcuk on X and ‘Advanced Propulsion Centre UK’ on LinkedIn.
Please note, this article will also appear in the 24th edition of our quarterly publication.
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