DRIVE35 Scale-up Fund Drawdown 5

UK registered organisations can apply for a share of up to £150 million to create scale up manufacturing facilities for zero emission vehicle technologies.

Competition opens: Monday 10 August 2026 Competition closes: Wednesday 4 November 2026 11:00am

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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, Innovation, Science and Trade (BIST) 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.

Innovate UK, part of UK Research and Innovation (UKRI), will work with the Department for Business, Innovation, Science and Trade (BIST) and the Advanced Propulsion Centre UK (APC) to invest up to £150 million as part of the DRIVE35 Scale Up Fund.

This is subject to a sufficient number of high quality applications being received.

This funding is from the Department for Business, Innovation, Science and Trade, delivered by Advanced Propulsion Centre and Innovate UK.

This competition is part of a long term commitment for driving growth sectors within the Government's Industrial Strategy.

The aim of the Scale up Fund is to support manufacturing facility and process development at pilot scale or demonstration scale. These projects will enable businesses to validate manufacturing capability and commercial viability, achieving market entry at the targeted production volume from the project outcomes.

Your proposal must justify the funding required with a case for government intervention and matched by substantial private investment.

In applying to this competition, you are entering into a competitive process. This competition has a funding limit, so we may not be able to fund all the proposed projects. It may be the case that your project scores highly but we are still unable to fund it.

Our experience from similar competitions suggests that you could have 30% chance of success.

We consider a range of factors when determining whether to provide funding to applicants. This includes an assessment of prior conduct, such as any outstanding payments owed to Innovate UK or UKRI. Such factors may influence the funding decision, potentially resulting in a refusal of funding or an award subject to additional scrutiny.

The Department for Business, Innovation, Science and Trade (BIST) is the budget holder for the DRIVE35 Programme and has the final funding decision.

We also reserve the right to adjust funding allocations for any of our competitions. This may be in response to changes in policy, portfolio funding considerations or broader government funding decisions.

The deadline for this drawdown submission is 11am UK time on the dates stated in this Innovate UK competition brief. We cannot guarantee other government, or third party sites will always show the correct competition information.

We plan to open Drawdown 6 on the next working day after this competition closes, but this may change. Drawdown 6 will be a separate competition on IFS. If you do not submit your application to this competition by the deadline, it will not carry over to Drawdown 6. You will need to start and submit a new application if you want to apply to Drawdown 6.

Funding type

Grant

Project size

Your project’s total eligible grant funding request must be between £2.5 million and £20 million. Your project’s total eligible costs must be over £5 million.

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:

• be a single applicant or consortia led
• have a total grant funding request of between £2.5 million and £20 million
• have total eligible costs of at least £5 million
• last for at least 12 months, including an initial period where you can raise the co-investment before your project starts
• start from 1 June 2027
• end by 31 March 2030

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. Eligible capital costs are explained within the application. For specific guidance, see the eligibility section in this competition.

If your project’s total grant funding request or duration falls outside of our eligibility criteria, you must provide justification by email to competitions@apcuk.co.uk 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.

Raising co-investment Following award of a grant offer, you will have a period of up to nine months, to raise the co-investment required to deliver this project. Further details about this requirement are included in the ‘what happens if you receive a grant offer’ section.

Lead organisation To lead a collaborative project or work alone, your organisation must be a UK registered business of any size.

More information on the different types of organisation can be found in our Funding rules.

Research and technology organisations (RTO’s) and Academic institutions cannot lead or work alone.

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 the 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 request funding
• you must explain why you’re collaborating and how the collaboration will work

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 A business can lead or collaborate on any number of applications.

An academic institution, research and technology organisation (RTO), charity, not for profit or public sector organisation can collaborate on any number of applications.

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:

• failed to exploit a previously funded project
• an overdue independent accountant’s report
• an overdue industrial contribution payment to the Advanced Propulsion Centre UK Ltd (APC) and its affiliates
• 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 us 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.

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 £150 million has been allocated to fund Scale-up 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.

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.

The balance between your total eligible project costs and the amount of grant awarded must be funded by the organisation receiving the grant.

The grant requested must be the minimum required to ensure sustainability of the investment.

For your project, you can get funding for your eligible project costs of:

• up to 50% if you are a micro, small or medium sized organisation
• up to 30% if you are a large sized business

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 10% 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 10% you can get funding for your eligible project costs of up to:

• 100% of your eligible project costs if you are an RTO, charity, not for profit organisation, public sector organisation or research organisation
• 80% of full economic costs (FEC) if you are an academic institution

Eligibility criteria for claiming 80% of FEC funding

• Research organisations must use the Transparent Approach to Costing (TRAC) method as the Je-S form has now been decommissioned.
• 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.

APC industry support In securing funding from this programme, each participant receiving a grant will pay an industrial contribution to the APC operating budget. This is set at 3.5% and is payable on each grant payment received. The cost cannot be included as an eligible cost in your application.

Your proposal

The aim of the Scale up Fund is to support manufacturing facility and process development at pilot scale or demonstration scale. These projects will enable businesses to validate manufacturing capability and commercial viability, achieving market entry at the targeted production volume from your project outcomes.

Your proposal must justify the funding required with a case for government intervention and matched by substantial private investment.

Your project must:

• support growth, transition, and resilience of the UK’s automotive supply chain, increasing capability whilst improving productivity, efficiency, and competitiveness
• contribute to the UK’s strategic aims and priorities, such as the Industrial Strategy, the Automotive Council’s Roadmaps and Strategic Technology areas for eligible on-vehicle technologies, including zero emission vehicle assembly and the associated supply chain
• undertake a scale up project to engineer, create (or convert) and validate process development and manufacturing capability at pilot scale or demonstration scale

Technology scope This competition fund aims to support the manufacturing development of strategically important technologies for on board vehicle applications in one or more of the following areas:

• electrical energy storage, development of batteries, supercapacitors, their components, management, and integrated systems
• electric machines and associated driveline
• power electronics including Vehicle to Everything (V2X)
• internal combustion engine (ICE) for off road applications; we will fund project proposals that support a transition to zero emissions, utilising non-fossil fuels
• light weighting materials and manufacturing processes
• fuel cell systems and associated balance of plant
• hydrogen storage and management systems
• zero emission vehicle assembly

Within the technology scope outlined above Your project can include:

• upstream supply chain for the technologies, including raw materials, component manufacturing, and subassembly manufacturing
• circularity and design for disassembly projects delivering manufacturing systems which enable the disassembly, remanufacturing, recovery, and reuse of materials
• the deployment of technologies, to enable productivity and cost competitiveness across the relevant aspects of applicable manufacturing operations in any of the following areas: digital transformation, manufacturing process decarbonisation and lean manufacturing

Digital transformation can include integration of digital tools within the manufacturing process, for example, the use of AI, digital twins, and Internet of Things (IoT).

Manufacturing process decarbonisation can include processes that use renewable energy sources or innovations enabling reduced energy consumption within manufacturing processes, including capture and reuse.

Lean manufacturing can include implementation of innovative lean principles to improve efficient use of materials used in processes, reduce their environmental impact and improve efficiency including the use of advanced automation techniques.

Scope of activities This competition fund aims to support the development of manufacturing readiness at pilot scale or demonstration scale.

You must develop your readiness for manufacturing of zero emission vehicle technologies, including the following activities as examples:

• manufacturing facility planning and engineering, including for example, detailed facility or process planning and engineering, finalisation of site selection
• fabrication and construction work
• manufacturing equipment creation, conversion, and procurement, for example, detailed production line design, equipment integration with site infrastructure, specification, procurement and purchasing
• equipment installation
• equipment commissioning, including for example, initial operation through to commission and run at rate, materials required for commissioning of equipment and processes
• process development
• development of quality control and quality assurance process and equipment
• Advanced Product Quality and Planning (APQP) activities required, up to and including production launch activities
• implementation of technology to enable efficient and effective production processes
• staff training
• activities focussed on product development required for ’design for manufacture’ where this enables your technology or product to be adapted for your target scale manufacturing, this activity must be no more than 50% of the project eligible costs
• development of UK supply chain for your target production scale
• test, validation and verification of components and systems which are manufactured for scale-up as part of this project
• dissemination to enable market engagement and market feedback
• limited commercial activity during the active phase of this project, it is defined in the scale of facilities section

Your project can include the activities required to design, build (or convert) and commission a pilot or demonstration scale manufacturing facility.

Scale of facilities We recognise that companies in different segments of the zero-emission vehicle supply chain use different terminology to describe their manufacturing development phases.

These are not suggested as absolute definitions, but instead as general categories to enable you to communicate the intention of your project.

The definitions are:

• pilot scale: scale up stage at which flexibility is key, used to develop initial production capability under real world conditions, whilst still maintaining significant flexibility for improvements once validated it will be similar to a low volume production facility
• demonstration scale: scale up stage to intermediate production scale, which reflects a production representative manufacturing workflow, focused on repeatability with lower flexibility than pilot, once validated it will be similar to a medium volume production facility

You may use your established terminology to describe your project in your application, but you must explain this clearly with regards to your goals and stages of development.

It may not be necessary to take each of these steps to get your technology to market, or you may take a different route. You must be clear about the objectives and scale of your project in your application.

Target market The aim of this competitive fund is to develop manufacturing processes and facilities that enable businesses to take eligible technologies through scale up and market entry and growth. As such, you must outline how your project will enable you to enter the following vehicle supply chains or markets:

• on-highway vehicles, for example including: L-category, motorbike, car, light commercial vehicle, bus, coach, and truck applications
• off-highway vehicles and Non-Road Mobile Machinery (NRMM), for example including: construction, agriculture, mining, and other off-highway applications

You must indicate how:

• you will engage your target vehicle related customers through the delivery phase of this project
• this project will enable you to meet their criteria for adoption
• you will feed this information back into your project to ensure it remains targeted on successful commercial outcomes

You must explain where your scale up project enables entry into other markets. These may be outside of the target markets, for example, near term or early adopter markets. You must be clear how your project prepares your business for entry into one of these vehicle markets following your projects completion.

Eligible costs include:

• labour costs: this includes the costs of employed staff working directly on your project, including indirect back-office staff who support project activities like budgeting, project reporting, and recruiting
• overheads: as a labour cost
• materials costs: costs for materials used in the research, development and scale up process
• subcontracting costs: costs for subcontracting specific tasks or services to third party providers
• travel and subsistence costs: costs for travel and subsistence related to your project
• capital equipment costs: costs for purchasing or leasing new equipment necessary for your project, including machinery, tools, computers, AV, furniture, and other equipment required for scale up activities
• capitalised labour costs: labour costs capitalised as part of the delivery of a capital project, this must not include labour costs associated with operational elements of a project
• capital other costs: any other project capital costs
• capital utilisation costs: costs for utilising equipment that is not claimed as capital costs and is necessary for your project, including machinery, tools, and other equipment required for scale up activities
• indirect costs: other indirect costs that are necessary for your project

Capital property costs include:

• construction costs, for example, new build, refurbishment and fit-out
• equipment procured from a works contractor, for example, furniture, fixtures and fittings, IT and AV costs
• equipment, professional fees including legal, Project Manager or Quantity Surveyor, design fees, commissions, statutory fees, consultant fees, project insurance

Ineligible costs include:

• working capital to enable commercial production
• costs of materials sold as part of limited commercial activity
• costs or expenses that will be incurred or defrayed outside of the time period covered by the live phase of your project
• contingency costs
• any fees associated with any periodic audit or accountancy reports that we require in accordance with the grant
• land purchase costs or property acquisition, including acquisition price, Land Registry fees and Stamp Duty Land