DRIVE35 Demonstrate funding targets EV supply chain risk

The stator windings pictured are where YASA is testing rare-earth-free and heavy-rare-earth-free designs side by side, rather than betting on a single replacement technology

(Image courtesy of YASA)

Ten UK automotive projects have secured £9 million in DRIVE35 Demonstrate funding, taking combined government and industry investment past £18 million. For engineers and procurement teams tracking UK supply chain resilience, the total matters less than the mix. The ten projects span everything from materials and components to finished vehicle platforms, with rare-earth magnets, battery cell disassembly and low-floor van design all represented in the same funding round.

DRIVE35 Demonstrate funding targets material and component risk

YASA’s Project Resilience is a clear example. The Oxford motor manufacturer will pursue two parallel technology pathways, developing both rare-earth-free and heavy-rare-earth-free axial flux motor designs on its existing stator platform. The aim is to reduce exposure to magnet supply chains that are geographically concentrated and vulnerable to export restrictions and price volatility, a risk that has grown more visible across drivetrain electrification programmes generally.

Nexperia UK‘s ADET-MOS project sits in the same category. It will demonstrate a next-generation silicon power MOSFET architecture intended to improve energy efficiency across EV electrical systems, a component-level gain that feeds directly into powertrain integration work further up the supply chain.

Battery recycling and materials projects round out the mix

Watercycle Technologies‘ CAMCYCLE aims to demonstrate a lithium-ion battery recycling route that the company states could cut CO2 emissions by up to 50%, reduce energy consumption by up to 70% and lift material recovery by up to 30% against current processes. GreenTech Industries‘ AutoDMR will build what APC describes as the UK’s first precision automated EV battery disassembly facility, using robotics to maximise value recovery from end-of-life packs. Anaphite‘s SAVI project will scale and validate the company’s Dry Coating Precursor technology for manufacturing dry-coated LFP electrodes, a process route aimed at battery cell chemistry gains without the solvent-heavy steps of conventional coating.

Two further projects target manufacturing efficiency directly. Thermulon‘s AEROPAD will scale aerogel battery-safety pad manufacturing to MRL 5, building a demonstrator mini-rig and anchoring UK ZEV supply chains. DeepForm‘s project for trucks will demonstrate metal-pressing technology intended to reduce material waste, production costs and carbon emissions in the manufacture of steel truck cab components.

Vehicle and fleet-facing systems close out the round

Eatron Technologies‘ ZENBMS will develop a 48V battery management system built on Infineon’s next-generation BMS chipset. Hyster-Yale Group‘s project will deliver a scalable, energy-efficient manufacturing capability intended to secure long-term lithium-ion battery production at its Craigavon site and position it as a leader in next-generation electrified materials-handling solutions. Electra Commercial Vehicles will develop a low-floor battery-electric van platform that removes the need for a tail lift, increasing payload volume and improving safety.

What the DRIVE35 Demonstrate round signals for suppliers

This Demonstrate award is one part of a larger picture. This Demonstrate award is one part of a larger picture. The wider DRIVE35 round has allocated more than £47 million across 33 projects, split between Mobilise, Collaborate, Demonstrate and Scale-up streams, and is expected to leverage over £90 million in total project investment. DRIVE35 launched in July 2025 as part of the government’s Advanced Manufacturing Sector Plan and Modern Industrial Strategy, with up to £4 billion in grant funding earmarked for the automotive sector through to 2035.

For suppliers evaluating where UK public funding is concentrating, the pattern in this round points toward derisking the material and component base of electrification, alongside continued investment in finished vehicle programmes. Recycling, magnet substitution and power semiconductor efficiency all sit upstream of homologation and commercial deployment, and Ian Constance, chief executive at APC, framed the value of the round in those terms. He said the projects “demonstrate the depth of innovation and engineering excellence that exists across the UK automotive sector,” adding that real-world demonstrations build the evidence and confidence needed to move technologies from prototype into commercial production. DRIVE35’s Scale-up Fund, which supports manufacturing-ready technologies, is already open as a later stage of the same programme.

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