The government has earmarked £65m for electric-vehicle projects led by Bentley and Nissan under its DRIVE35 programme, with £50m of public money to be matched by industry, in a package it says will support 1,800 jobs as UK car production sits at a 70-year low.
The funding, reported on 9 August, is the latest tranche from DRIVE35, the multi-billion-pound scheme the government is using to keep vehicle design and manufacturing in the UK as the sector transitions to electric. Of the £65m total, £50m is government contribution towards car firms and research partners, with the companies involved expected to match the commitment.
Bentley, the Crewe-based luxury marque owned by Volkswagen, is leading one consortium, while Nissan, whose UK plant is in Sunderland, is directing its share towards autonomous-vehicle work. The split points the money at two ends of the market at once: high-end electrification and the software-defined, self-driving technologies that carmakers are racing to commercialise.
Industry Minister Blair McDougall framed the commitment as a defence of domestic manufacturing. "Britain invented the modern motor industry and we're determined to ensure the next generation of vehicles are designed and built here too," he said.
The capital arrives against a difficult backdrop. UK vehicle production has fallen to its lowest level in roughly 70 years, even as the industry continues to generate around £25bn a year and directly employ some 183,000 people. Ministers are betting that targeted co-investment can slow the erosion and pull private capital in behind it.
The politics are contested. The package lands amid a backlash over the 2030 ban on new petrol and diesel cars, with manufacturers and unions pressing for flexibility. Former prime minister Keir Starmer was reported to have considered watering down the target in June under that pressure, while Energy Secretary Ed Miliband declined to meet motor trade bodies over the mandate. Conservative Shadow Business Secretary Andrew Griffith attacked the approach as an "idiotic 2030 ban" that risks forcing British carmakers to subsidise Chinese EV rivals.
For the recipients, the structure matters as much as the headline figure. DRIVE35 grants are non-dilutive: they underwrite research and industrialisation costs without taking equity, leaving ownership of Bentley and Nissan's UK operations unchanged while de-risking the capital expenditure needed to retool for electric and autonomous production.
The wider question is whether public co-funding can crowd in the private investment the supply chain needs. With battery, motor and drivetrain capacity still concentrated overseas, the government is using DRIVE35 to signal long-term commitment to the sector. The 1,800 jobs attached to this tranche will be an early measure of whether the strategy is translating grants into durable manufacturing capacity, or merely slowing a longer decline.
Original source: City AM — https://www.cityam.com/government-to-inject-millions-into-electric-vehicle-firms-despite-mandate-backlash/
