EVs and autonomous car production gets £130m Govt cash boost
The £130 million cash injection will be supported by the Government and the UK automotive industry in equal measures
The UK Government has announced a £130 million cash injection into the nation’s struggling car industry. With vehicle production having recently hit a new low, No 10 says the new investment will safeguard more than 1,800 jobs and will be funded equally by the state and the automotive industry.
The cash will be delivered via the Government’s Drive35 programme, which is designed to accelerate and support the development and production of electric vehicles in the UK – including the formation of crucial supply chains. Key beneficiaries of the latest investment, which follows a previous £100 million of funding courtesy of the Government’s £2 billion ‘Automotive Transformation Fund’, include Nissan and Bentley, as well as a host of other automotive technology firms.
Industry minister, Blair McDougall MP, said: “Britain invented the modern motor industry and we’re determined to ensure the next generation of vehicles are designed and built here too. This investment will secure skilled jobs, strengthen our manufacturing heartlands and help drive the reindustrialisation of Britain.”
Contrary to popular opinion, cars are no longer the UK’s most valuable export; in the year ending May 2026, the UK shipped £27.2 billion worth of vehicles abroad, compared to £46.3 billion in power generators – now our most lucrative international industry.
Such figures have not been helped by the fact that UK vehicle manufacturing is at a 73-year low; in 2025, just 764,715 vehicles were built here – the fewest since the 1950s. Yet while this was undoubtedly caused by tariffs imposed by US President Donald Trump, a cyber attack on Jaguar-Land Rover and the closure of the historic Vauxhall Luton plant, things look to be going from bad to worse in 2026. The latest Society of Motor Manufacturers and Traders data suggests vehicle output declined by 7.5 per cent in the first half of 2026, although the trade body says this downturn is beginning to stabilise.
In the meantime, the Government’s latest splash of cash will support R&D and collaborative projects in both manufacturing and self-driving tech. The newly renamed Department for Business, Innovation, Science and Trade says £17 million will be distributed to support nine Connected and Automated Mobility (CAM) projects – one of those being carried out by Nissan.
All of this comes as part of new Prime Minister and Labour leader Andy Burnham’s focus on what the Government describes as “delivering good growth in every postcode”. It also coincides with news that No 10 is about to begin its consultation on potentially rowing back its electrification commitments forming the ZEV Mandate – something that has garnered a mixed response throughout the industry.
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