DRIVE35 Innovation Fund: Demonstrate 2

The DRIVE35 Innovation Fund: Demonstrate 2 is a funding competition offering up to £33 million in total for late-stage demonstration R&D projects supporting the UK's transition to zero emission vehicles and a net zero automotive industry. This strand specifically supports projects developing product or process demonstrators to show increased capability and commercial exploitation opportunities. Projects can be collaborative or led by a single business working alone. The programme is led by the Department for Business and Trade in collaboration with Innovate UK, the Advanced Propulsion Centre UK (APC), automotive industry partners, and academia. Projects must focus on strategically important technologies that design, develop, and manufacture innovations in the automotive sector, supporting growth, transition, and security of the UK's automotive supply chain while improving productivity, efficiency, and competitiveness. Eligible projects must align with at least one of three scope themes: (1) Promote Zero Emission Vehicle Technologies including batteries, electric machines, power electronics, fuel cells, and hydrogen systems; (2) Enhance Manufacturing Competitiveness through digital transformation, process decarbonisation, and lean manufacturing; or (3) Future Vehicle Innovation focusing on Software Defined Vehicles (SDV) and Electrical/Electronic Architectures. All projects must achieve TRL 5-6 or MRL 4-5 by completion and demonstrate clear commercialisation pathways. Projects must last 9-12 months, start from 1 September 2026, and carry out all work in the UK with the intention to exploit results domestically. Grant funding ranges from £500,000 to £1.5 million per project, requiring minimum 50% match funding. All projects should be prepared for potential selection to showcase outcomes at the 2027 CENEX Expo.