UK launches new multi-billion pound push for electric mobility

The British government has unveiled DRIVE35, a new programme to finance a wide range of projects supporting the transition to manufacturing zero-emission vehicles – from established high-volume production and gigafactories to start-ups, prototypes, and innovative automotive technologies. DRIVE35 foresees £2 billion in funding by 2030, alongside an additional £500 million for research and development by 2035.

Officially, DRIVE35 is described as a “commitment over the next decade that will support thousands of jobs and help ensure the UK remains at the forefront of zero-emission vehicle development” and forms part of Britain’s Advanced Manufacturing Sector Plan under its modern industrial strategy.

EV market growing, but slower than planned

Although the UK was Europe’s largest market in 2024 with 382,000 electric vehicles, and the public charging network has grown to over 82,000 units, the market is not developing as fast as mandated under the Zero Emission Vehicle (ZEV) targets. Manufacturers must meet annual sales quotas to avoid penalties. However, with subsidies cut back by policymakers, manufacturers only met their 2024 targets through deep discounts and subsequently increased their resistance. Stellantis, for example, had threatened to close its Luton van plant rather than invest in planned electric van production – and indeed shut it down at the end of March.

It appears the government has listened to the industry. In late April, not only were ZEV regulations relaxed, but now an investment offensive has been announced. The closure of Stellantis’ Luton plant was not the only setback; plans for Britishvolt’s major battery factory also collapsed. Apart from Nissan in Sunderland, supported by AESC’s nearby battery factory, production at British car plants has been slow to transition to EVs. One of the most successful brands in the UK remains MG, now owned by SAIC with production based entirely in China.

“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 as we deliver our Plan for Change,” said Business and Trade Secretary Jonathan Reynolds. “We’re taking action to back the industry for the future with the biggest set of announcements for the sector in the last decade. 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 ZEV mandate, supporting UK manufacturers to safeguard jobs, and secure the future of the sector.”

Purchase incentive could be announced this week

In addition to industry support, charging infrastructure is also receiving further funding. The British government is increasing investment in charging: an additional £63 million will go towards grants for home chargers for households without driveways, the installation of thousands of charge points at business sites, and electrifying the National Health Service (NHS) fleet. In June, the Department for Transport announced plans to use part of the £381 million Local Electric Vehicle Infrastructure (LEVI) fund to install over 100,000 charge points, making EV use easier for those without access to private chargers.

Moreover, the British government is reportedly preparing a new subsidy programme for electric car purchases. Transport Secretary Heidi Alexander told the BBC: “We are going to be making some announcements later this week on how we make it more affordable for people to buy an electric vehicle.” Full details are expected on Tuesday. According to the Telegraph, the government plans to allocate £640 million to reduce EV purchase costs, similar to the scheme discontinued in 2022. The reported plan includes a price cap and preferential treatment for EVs manufactured in the UK.

gov.uk (DRIVE35), gov.uk (charging funding), bbc.com, telegraph.co.uk (paywall, purchase incentive)