Funding competition DRIVE35 Innovation Fund: Collaborate 3

UK registered organisations can apply for a share of up to £20 million for late stage collaborative research and development projects. Projects will support the UK’s transition to zero emission vehicles and a pathway to a net zero automotive industry.

• Competition opens: Friday 26 June 2026
• Competition closes: Friday 18 September 2026 11:00am

This competition is now closed. [Start new application]

Competition sections

• Summary
• Eligibility
• Scope
• Dates
• How to apply
• Supporting information

Description

DRIVE35 (Driving Research and Investment in Vehicle Electrification) is a Department for Business and Trade led programme aimed at transforming the UK's automotive industry. This is achieved by supporting R&D and the commercial scale up of innovative zero emission vehicle technologies, and unlocking capital investment in zero emission vehicles, batteries and their wider supply chain. The Department for Business and Trade (DBT) will work with Innovate UK, part of UK Research and Innovation, the Advanced Propulsion Centre UK (APC) and the automotive industry and academia, to invest up to £20 million in innovation projects. This is subject to a sufficient number of high quality applications being received. The DRIVE35 Innovation Fund is part of a long term commitment for the driving growth sectors within the governments Industrial Strategy. The aim of DRIVE35 Innovation is to support R&D projects that design, develop and manufacture strategically important technologies in the automotive sector. Your project will support the UK’s transition to zero emission vehicles and a pathway to a net zero automotive industry. Your proposal must:

1. support growth, transition and security of the UK’s automotive supply chain, increasing capability whilst improving productivity, efficiency and competitiveness
2. contribute to the UK’s strategic aims and priorities, such as His Majesty’s Government’s Industrial Strategy as well as the Automotive Council’s Roadmaps and Strategic technology areas
3. enable future scale vehicle manufacture and strengthen high value production for domestic or export markets
4. deliver on-vehicle technologies or enable manufacturing capabilities which support the transition to zero emission vehicles
5. target post project commercialisation with clear articulation on how the innovation will be brought to market or used in an industrial setting
6. create and safeguard high value jobs during the project and through post project impact, which create a lasting economic benefit to the UK
7. support securing long term R&D investment

Funding type

Grant

Project size

Your project’s total eligible grant funding request must be between £2.5 million and £20 million. Your project must be a minimum of 50% match funded; see eligibility section for more details. A maximum of six partners is recommended.

Accessibility and Inclusion

We welcome and encourage applications from people of all backgrounds and are committed to making our application process accessible to everyone. This includes making reasonable adjustments for people who have a disability or a long-term condition and face barriers applying to us. You can contact us at any time to ask for guidance. We recommend you contact us at least 15 working days before this competition’s closing date to allow us to put the most suitable support in place. The support we can provide may be limited if you contact us close to the competition deadline. You can contact Innovate UK by email or call 0300 321 4357. Our phone lines are open from 9am to 12pm and 2pm to 5pm UK time, Monday to Friday (excluding bank holidays).

Who can apply

Your project Your project must:

1. have a total grant funding request of between £2.5 million and £20 million
2. be late stage R&D targeting direct commercialisation at the end of the project
3. be collaborative
4. be a minimum of 50% match funded, for example, if you are asking for £2.5 million in grant your total eligible project costs must be a minimum of £5 million
5. be in line with at least one of the three scope themes
6. achieve TRL 7-8 or MRL 6-7 by completion, based on published Automotive Technology and Manufacturing Readiness Levels
7. last between 18 and 36 months
8. start from 1 May 2027 Any organisation receiving funding must carry out its project work in the UK, intend to exploit the results in the UK, and spend most of the funding within the UK. Projects must always start on the first of the month, even if this is a non-working day. You must not start your project until your Grant Offer Letter has been approved by Innovate UK. Any delays within Project Setup may mean we need to delay your project start date. You must only include eligible project costs in your application. See our overview of eligible project costs. If your project’s total grant funding request or duration falls outside of our eligibility criteria, you must provide justification by email to support@iuk.ukri.org at least 10 working days before the competition closes. We will then decide whether to approve your request. If your project does not meet our criteria and you have not requested justification approval, your application will be made ineligible and it will not be sent for assessment. Lead organisation To lead a collaborative project your organisation must:
9. be a UK registered business of any size
10. collaborate with other UK registered organisations
11. be a grant claiming recipient
12. include in your consortium a vehicle manufacturer or Tier 1 supplier who supplies parts directly to an original equipment manufacturer (OEM) The consortium must contain at least one UK registered micro, small or medium sized enterprise (SME) claiming grant funding on this application. More information on the different types of organisation can be found in our Funding rules. Academic institutions cannot lead an application for this competition. Project team To collaborate with the lead, your organisation must be one of the following UK registered:

• business of any size
• academic institution
• charity
• not for profit
• public sector organisation
• research and technology organisation (RTO) Each partner organisation must be invited into the Innovation Funding Service (IFS) by the lead to collaborate on a project. Once partners have accepted the invitation, they will be asked to login or to create an account in IFS. They are responsible for entering their own project costs in the application. To be an eligible collaboration, the lead and at least one other organisation must:

1. apply for funding when entering their costs into the application
2. include rationale for the collaboration and describe the structure in your application Non-funded partners Your project can include organisations who do not claim any funding for their work on the project. Their costs will be covered from their own resources. These can include UK, EU and other non-UK organisations. Non-UK partners are permitted to carry out project work from within their home countries and exploit the results outside the UK. Where non-funded partners have been invited to the application on IFS, their costs will count towards the total eligible project costs. Subcontractors Subcontractors are allowed in this competition. Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process. You can use subcontractors from overseas but must make the case in your application as to why you cannot use subcontractors from the UK. You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor. All subcontractor costs must be justified and appropriate to the total project costs. Number of applications There is no limit to the number of applications an organisation can be involved in. Successful applicants will be asked to confirm they have the capacity to run multiple projects simultaneously. Sanctions This competition will not fund you, or provide any financial benefit to any individual or entities directly or indirectly involved with you, which would expose Innovate UK or any direct or indirect beneficiary of funding from Innovate UK to UK Sanctions. For example, through any procurement, commercial, business development or supply chain activity with any entity as lead, partner or subcontractor related to these countries, administrations and terrorist groups. Use of animals in research and innovation Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance. Applicants must ensure that all of the proposed work within projects, both in the UK and internationally, will comply with the UKRI guidance on the use of animals in research and innovation. Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations, as well as compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.

Previous applications

You can use a previously submitted application to apply for this competition. If you have previously submitted an application that reached our assessment stage, you can re-apply once more with the same proposal. If there are minor differences to the proposal, but it is judged by us to be ‘not materially different’, the same rule applies. We will not award you funding if you have:

1. overdue industrial contribution payments to Advanced Propulsion Centre (APC) UK Limited
2. failed to exploit a previously funded project
3. an overdue independent accountant’s report
4. failed to comply with grant terms and conditions Innovate UK may withhold a grant payment at any time if you have any outstanding sums due to Innovate UK or APC in relation to other projects.

Subsidy control (and State aid where applicable)

This competition provides funding in line with the Subsidy Control Act 2022. Further information about the Subsidy requirements can be found within the Subsidy Control Act 2022 (legislation.gov.uk). Innovate UK is unable to award organisations that are considered to be in financial difficulty. We will conduct financial viability and eligibility tests to confirm this is not the case following the application stage. EU State aid rules now only apply in limited circumstances. See the Windsor Framework to check if these rules apply to your organisation. In the ‘Project details’ section of your application you will be asked questions to indicate if State Aid or Subsidy applies to your organisation. Further Information If you are unsure about your obligations under the Subsidy Control Act 2022 or the State aid rules, you should take independent legal advice. We are unable to advise on individual eligibility or legal obligations. You must not do anything which could cause a breach of Subsidy Control legislation applicable in the United Kingdom. This aims to regulate any advantage granted by a public sector body which threatens to, or distorts competition in the United Kingdom or any other country or countries. This award is classified as a Subsidy which does not form part of your Minimal Financial Assistance or de minimis allowance.

Funding

Up to £20 million has been allocated to fund innovation projects in this competition. This is subject to us receiving a sufficient number of high quality applications. Funding will be in the form of a grant. We reserve the right to adjust funding allocations for any of our competitions under exceptional circumstances, for example, in response to changes in policy, portfolio funding considerations, or broader government funding decisions. These are pre-production projects and you must apply for the minimum amount of grant funding required to make your project viable. Your total grant funding request must be no more than £20 million and no more than 50% of your total eligible project costs. This is regardless of your individual partners’ grant claims. A minimum of 70% of your project’s total project costs must be incurred by commercial organisations. If your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically but for the purpose of this project will be undertaking commercial or economic activity. For industrial research projects, you can get funding for your eligible project costs of:

1. up to 70% if you are a micro or small organisation
2. up to 60% if you are a medium sized organisation
3. up to 50% if you are a large organisation For experimental development projects which are nearer to market, you can get funding for your eligible project costs of:
4. up to 45% if you are a micro or small organisation
5. up to 35% if you are a medium sized organisation
6. up to 25% if you are a large organisation For more information on company sizes, refer to the company accounts guidance. If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003. Innovate UK may revoke our decision to provide funding without notice if government commitment for this initiative is withdrawn. Research participation The research organisations undertaking non-economic activity as part of the project can share up to 30% of the total eligible project costs. If your consortium contains more than one research organisation undertaking non-economic activity, this maximum is shared between them. Of that 30% you can get funding for your eligible project costs of up to:
7. 100% of your eligible project costs if you are an RTO, charity, not for profit organisation, public sector organisation or research organisation
8. 80% of full economic costs (FEC) if you an academic institution Eligibility criteria for claiming 80% of FEC funding
9. Research organisations must use the Transparent Approach to Costing (TRAC) method as the Je-S form has now been decommissioned.
10. We pay 100% of the 80% Full Economic Cost (FEC). On IFS only enter the 80% being claimed. To find out more see our: Cost Guidance for Academics. The Advanced Propulsion Centre UK (APC) A 3.5% industrial contribution is payable to the APC by all partners on grant received.

Your proposal

The aim of the DRIVE35 Innovation Fund is to support R&D projects that design, develop and manufacture strategically important technologies in the automotive sector. Your project will support the UK’s transition to zero emission vehicles and a pathway to a net zero automotive industry. The aim of this competition is to support collaborative R&D projects that design, develop and enable manufacture of technologies which target post project commercialisation.

Specific themes

Your project must focus on one or more of the following: Theme 1: Promote zero emission vehicle technologies You must focus on product and process innovations that contribute to achieving zero emissions for on board vehicle applications in one or more of the following areas:

• electrical energy storage: development of batteries, supercapacitors, their components, management, and integration systems
• electric machines and associated driveline
• power electronics including Vehicle-to-Everything (V2X)
• Internal Combustion Engines (ICE) for on road applications, we will only fund project proposals which aim to achieve zero harmful tailpipe emissions utilising non-fossil fuels
• Internal Combustion Engines (ICE) for off road applications, we will fund project proposals that support a transition to zero emissions, utilising non-fossil fuels
• lightweight vehicle and powertrain structures
• fuel cell systems and associated balance of plant
• hydrogen storage and management systems Within the technology scope outlined above; Your project can include:
• upstream supply chain for the above technologies including raw materials, component manufacturing, subassembly manufacturing
• circularity and Design for Disassembly: projects focused on the disassembly, remanufacturing, recovery, and reuse of materials
• digitalisation of validation, verification, and design: use of digital tools to enhance the design, validation, and verification processes for the listed technologies Theme 2: Enhance manufacturing competitiveness R&D projects which use innovations to enable productivity and cost competitiveness and reduce embedded carbon. These will be across all aspects of zero emission vehicle and technology manufacturing and their associated supply chain in one or more of the following areas:
• digital transformation: integration of digital tools within the manufacturing process, for example, the use of AI, digital twins, vision systems and internet of things (IoT)
• manufacturing process decarbonisation: switching processes to use non fossil energy sources or innovations enabling reduced energy consumption within manufacturing processes including capture and reuse
• lean manufacturing: implementation of innovative lean principles to improve circularity of materials used in processes, reduce their environmental impact and improve efficiency including the use of advanced automation techniques
• supply chain development: initiatives for suppliers to improve their processes, capability and capacity for R&D and subsequent industrialisation, for example, flexible production lines to service multiple customers to lower capital investment as well as UK capability building to enable market access and sustainability The technologies in scope within this theme apply to any component, sub assembly or system involved in the manufacture of zero emission vehicles. Your proposal must have an outcome which increases the likelihood and competitiveness of manufacturing zero emission vehicles and their supply chain in the UK. Theme 3: Future vehicle innovation - Software defined vehicles (SDV) and Electrical/Electronic (E/E) architectures Software Defined Vehicles (SDV) and Electrical/Electronic (E/E) architecture is focused on enabling features through software and involves a major paradigm shift and redesign across the electrical and electronic architectures. This transformation is critical to supporting zero emission vehicle functionality and leveraging UK innovation strengths for global competitiveness. This is system, vehicle and process level evolution in one or more of the following areas:
• delivering features faster, through a shift to rapid software native tools and processes adapted to meet automotive safety and security requirements (software factory)
• innovations in embedded software development and connectivity to enhance performance, safety, and time to market
• development of advanced control systems software and platforms, including software and control systems integration
• scalable and flexible future E/E architectures, communication systems, and high performance compute including their systems, components, sensors and actuators
• vehicle and system level simulation, including the use of digital twins and in the loop (xIL) innovations to enable rapid simulation, optimisation, and validation of interconnected systems
• innovations in the safe and secure use of AI in the functional software
• innovations in tools, processes and design practices for SDV and E/E architectures, including AI driven approaches for development, validation and optimisation Portfolio approach We want to fund a variety of projects across different strands, themes, technologies, markets, organisational size, technological or manufacturing maturities and research categories. We call this a portfolio approach.

Research categories

We will fund industrial research projects and experimental development projects, as defined in the guidance on categories of research.

Projects we will not fund

We are not funding projects that are:

1. requesting more than 50% grant for total project costs
2. focused on business processes not directly involved in the design, test, validation, recycle or reuse or manufacture of vehicles, for example, company back office systems and infrastructure
3. including the design, development, integration, use, test or direct manufacturing of automated driving systems (ADS)
4. only focused on the development of clean fuels
5. not aligned with the UK net zero research innovations framework
6. developing solutions such as e-Scooters or e-Bikes, although two wheel is in scope We cannot fund projects that are:
7. dependent on export performance: giving a subsidy to an organisation on the condition that it exports a certain quantity of its products to another country
8. dependent on domestic inputs usage: giving a subsidy to an organisation on the condition that it uses a set percentage of UK components in their product

Before you start

You must read the guidance on applying for a competition on the Innovation Funding Service before you start. Before submitting, it is the lead applicant’s responsibility to make sure:

1. that all the information provided in the application is correct
2. your proposal meets

Dates

• 26 June 2026: Competition opens
• 8 July 2026: Online briefing event: watch the recording
• 18 September 2026 11:00am: Competition closes
• 7 October 2026: Invite to interview
• 15 October 2026: Economic Feedback issued
• 22 October 2026: Response to Economic Feedback
• 22 October 2026: Consolidated feedback issued
• 30 October 2026: DBT VfM discussion
• 30 October 2026: Response to Consolidated Feedback
• 2 November 2026: Submit presentation, collaboration agreement and list of interview attendees
• 3 November 2026: VfM changes to be returned
• 9 November 2026: Interview panel starts
• 13 November 2026: Interview panel ends
• 18 December 2026: Applicants notified
• 1 May 2027: Project start from