Britain's carmakers to get £2.5 billion boost to help transition to electric

Britain's car makers will get a £2.5 billion government boost to help them transition to building electric vehicles - and supporting thousands of manufacturing jobs.

The cash will be distributed through competitions over 10 years, where companies can bid for support for a range of projects from start up prototypes to huge gigafactories.

The aim of the DRIVE35 project is to keep British manufacturing and the supply chain that supports it competitive as the industry shifts to zero-emissions vehicles.

"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,” Business Secretary Jonathan Reynolds told the Sunday Mirror.

The money will be spent in two parts - £2 billion to support car factories, battery plants and startups by 2030, with a further £500m for research and development to be spent by 2035.

“We're taking action to back the industry for the future with the biggest set of announcements for the sector in the last decade,” Mr Reynolds added.

“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 [zero-emissions vehicle] mandate, supporting UK manufacturers to safeguard jobs, and secure the future of the sector."

The automotive industry added £21.4 billion to the UK economy in 2024, and currently employs 132,000 people.

The UK was also the biggest electric vehicle market in Europe the same year - and the third in the world with over 382,000 EVs sold – up a fifth on the previous year.

The UK's Zero Emission Vehicles mandate requires car manufacturers to sell an increasing share of electric cars every year, with the goal of eliminating the sale of new petrol and diesel cars by 2030.

New hybrids will still be allowed to be sold until 2035.

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Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), the car industry’s trade association, said: “The creation of this dedicated automotive programme is further evidence of the sector’s importance to economic growth.

“Delivered as part of the Industrial Strategy, DRIVE35 has the potential to unlock investment and innovation in the UK, supporting jobs and creating wealth across the country.

“The importance of a long term, cross-government strategy with specific measures for automotive cannot be understated given the challenges facing the sector amid geopolitical uncertainty and fierce global competition.

“DRIVE35, and the wider measures identified in the Industrial Strategy, must now be implemented at pace to ensure the UK is amongst the leaders in next generation automotive technologies.”