DRIVE35 Innovation Fund: Collaborate

Overview

DRIVE35 (Driving Research and Investment in Vehicle Electrification) is a Department for Business and Trade programme supporting the UK’s automotive transition to zero emission vehicles. Working with Innovate UK, the Advanced Propulsion Centre UK (APC), industry and academia, up to £40 million will be invested in innovation projects.

The programme funds R&D to design, develop, and manufacture strategically important technologies, creating high value jobs and attracting long-term investment.

This competition has two strands:

• Strand 1: Collaborate (this strand)

• Strand 2: Demonstrate

Strand 2 supports developing product or process demonstrators that increase commercial exploitation opportunities. Applications must be submitted to the correct strand.

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Scope

Strand 1 supports collaborative R&D for technologies that advance the UK automotive sector’s net zero ambitions. Projects must align with one or more themes:

Theme 1 – Promote Zero Emission Vehicle Technologies:

• Electrical energy storage (batteries, supercapacitors)
• Electric machines and driveline
• Power electronics (V2X)
• ICE (on-road/off-road) with zero harmful tailpipe emissions using non-fossil fuels
• Lightweight materials
• Fuel cells and hydrogen systems

Including upstream supply chain, circular design, and digital design and validation tools.

Theme 2 – Enhance Manufacturing Competitiveness:

• Digital transformation (AI, IoT, digital twins)
• Manufacturing decarbonisation
• Lean manufacturing
• Supply chain development and UK capability building

Theme 3 – Future Vehicle Innovation:

• Software Defined Vehicles (SDV) and advanced E/E architectures
• Digital twins for validation and simulation
• Embedded software
• Network communications
• Advanced control systems

All projects must support commercialisation, improve UK supply chain resilience, and contribute to strategic national goals.

Key themes and topics

Projects should:

• Support the UK automotive industry’s shift to net zero.
• Enable commercialisation of technologies.
• Enhance productivity, efficiency, and competitiveness.
• Create and safeguard high-value jobs.
• Secure long-term R&D investment.

Project duration

• Projects must last between 18 and 36 months.
• Must start by 1 March 2026 and finish by 28 February 2029.
• Must start on the first of the month.

Award value

• Grant request must be between £2.5 million and £25 million.
• Projects must be minimum 50% match funded.
• A maximum of six partners is recommended.

Funding rates

For industrial research projects, purposeful research that builds new knowledge and skills to improve or develop products, processes, or services—often through prototypes or system components that validate ideas in realistic settings, you can get funding for your eligible project costs of:

• up to 70% if you are a micro or small organisation
• up to 60% if you are a medium sized organisation
• up to 50% if you are a large organisation

For experimental development projects, which use existing knowledge to shape and refine new or improved products, processes, or services—through prototyping, testing, and validation, not routine upgrades and are nearer to market, you can get funding for your eligible project costs of:

• up to 45% if you are a micro or small organisation
• up to 35% if you are a medium sized organisation
• up to 25% if you are a large organisation

Research organisations can share up to 30% of the total eligible project costs. Within this allocation:

• up to 100% of eligible costs can be claimed if you are an RTO, charity, not-for-profit, public sector organisation, or research organisation
• up to 80% of full economic costs (FEC) can be claimed if you are a Je-S registered academic institution

An industrial contribution of 3.5% of the grant is payable to the APC by all grant recipients. At least 70% of the total project costs must be incurred by commercial organisations.

Eligibility criteria

Your project must:

• Be collaborative R&D.
• Request between £2.5 million and £25 million in grant.
• Be late-stage R&D targeting commercialisation.
• Align with at least one scope theme.
• Achieve TRL 7–8 or MRL 6–7 by completion.
• Carry out work and exploit results in the UK.

Lead organisation:

• Must be a UK-registered business of any size.
• Must collaborate with others and include:
  • A vehicle manufacturer or Tier 1 supplier to an OEM.
  • At least one UK SME claiming grant funding.

Project team:

• May include businesses, academics, charities, public bodies, or RTOs.
• No single partner can claim more than 70% of total eligible costs.
• Non-UK partners allowed if self-funded and work is performed overseas.

Subcontractors:

• UK or overseas subcontractors are allowed if justified.
• Lower costs alone are not a valid reason to choose overseas providers.

Number of applications:

• No limit on the number of applications an organisation can be involved in.

Sanctions and animal research:

• Projects must comply with UKRI rules.
• No funding for sanctioned entities.

Previous applications:

• Re-submissions are allowed.
• Funding may be withheld for organisations that failed to deliver previous projects.

Subsidy control:

• Follows Subsidy Control Act 2022.
• Innovate UK cannot fund organisations in financial difficulty.

Research participation

• Research organisations can share up to 30% of total project costs.
• Funding rates:
  • 100% for RTOs, charities, public bodies or non-profits.
  • 80% FEC for Je-S-registered academic institutions.

An industrial contribution of 3.5% on grants is payable to the APC.