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Grant Analysis

Purpose & Target

The DRIVE35 Innovation Fund: Collaborate aims to support collaborative, late-stage research and development (R&D) projects in the UK automotive sector. The core objective is to accelerate the UK's transition to zero-emission vehicles and foster a net-zero automotive industry, specifically focusing on technologies that can be commercialized after the project. This grant explicitly targets UK-registered businesses that lead consortia, with a mandatory requirement for at least one UK registered micro, small, or medium-sized enterprise (SME) to be part of the grant-claiming consortium. It is SECTOR-SPECIFIC, exclusively focused on the automotive industry. Geographically, all project work must be carried out within the UK, and the results must be exploited from or in the UK. Key filtering criteria for initial screening include: being a UK-registered business, willingness to collaborate with other UK entities, having a project focused on late-stage R&D for zero-emission vehicle technologies, and including a UK SME and a vehicle manufacturer/Tier 1 supplier in the consortium. This funding is part of a broader, long-term commitment to the automotive sector within the government's Industrial Strategy, suggesting it may be a recurring opportunity.

Financial Structure

The financial structure for the DRIVE35 Innovation Fund: Collaborate grant involves significant co-funding and specific rules for different organisation types:

Total Fund Available: Up to £40 million has been allocated for late-stage R&D projects in this competition.
Grant Request Range: Your project's total eligible grant funding request must be between £2.5 million and £25 million.
Co-financing / Matching Fund Requirements:
- Your project must be a minimum of 50% match funded. This means the grant requested cannot exceed 50% of the total eligible project costs (e.g., if you request £2.5 million, your project's total eligible costs must be at least £5 million).
- The balance between your total eligible project costs and the amount of grant awarded must be funded by the organisation receiving the grant (i.e., your own contribution or private funds).
- Match funding must be private funds and not from other UK Government grants.
Commercial Contribution Requirement: A minimum of 70% of your project's total eligible costs must be incurred by commercial organisations within the consortium.
Grant Funding Rates (for Commercial Organisations): The percentage of eligible costs covered by the grant depends on the size of your organisation and the type of research:
- Industrial Research Projects (more fundamental, earlier stage R&D):
  - Micro or Small organisations: Up to 70% of eligible costs.
  - Medium organisations: Up to 60% of eligible costs.
  - Large organisations: Up to 50% of eligible costs.
- Experimental Development Projects (nearer to market, late-stage R&D):
  - Micro or Small organisations: Up to 45% of eligible costs.
  - Medium organisations: Up to 35% of eligible costs.
  - Large organisations: Up to 25% of eligible costs.
- Note: Company size definitions refer to guidance on company accounts (e.g., turnover, balance sheet, employee count).
Funding for Research Organisations (Non-economic activity):
- Research organisations (e.g., universities, RTOs) undertaking non-economic activity can collectively account for up to 30% of the total eligible project costs. If there's more than one, this 30% maximum is shared.
- These organisations can get funding for their eligible project costs of:
  - 100% if they are an RTO, charity, not-for-profit organisation, public sector organisation, or other research organisation.
  - 80% of full economic costs (FEC) if they are a Je-S registered academic institution.
Eligible Costs: Only eligible project costs should be included in your application. General guidance on eligible costs is available, but specific guidance for this competition should be followed. If your project's grant request or duration falls outside the standard eligibility criteria, you must obtain prior email approval from Innovate UK at least 10 working days before the competition closes.
Ineligible Costs: Projects that do not fit the scope or are explicitly excluded (e.g., e-scooters/e-bikes, ADS, clean fuels only, general back-office processes) will not have their costs funded.
APC Industrial Contribution: A 3.5% industrial contribution is payable to the Advanced Propulsion Centre UK (APC) by all partners on grant received. This is a post-award financial obligation.
Financial Reporting: As a condition of funding, you must provide annual records to the Department for Business and Trade (DBT) and APC, showing the realised and expected economic outputs your project has produced.

Eligibility Requirements

To be eligible for the DRIVE35 Innovation Fund: Collaborate, your project and organisation must meet several strict criteria:

Collaboration is Mandatory: This grant is exclusively open to collaborative projects. Your application will not be considered if it's from a single entity.
Lead Organisation: To lead a collaborative project, your organisation must be a UK registered business of any size.
Consortium Composition: The consortium must:
- Include at least one UK registered micro, small, or medium-sized enterprise (SME) that is claiming grant funding.
- Include a UK registered vehicle manufacturer or a Tier 1 supplier (a company that supplies parts directly to an original equipment manufacturer (OEM)).
- Collaborate with other UK registered organisations. Non-UK partners can be part of the consortium but must bring their own funding (they cannot claim grant funding from this competition).
- Be recommended to have a maximum of six partners.
- Ensure no single partner accounts for more than 70% of the total eligible project costs.
Eligible Partner Types: Besides the lead business, other UK registered collaborating organisations can include:
- Businesses of any size
- Academic institutions
- Charities
- Not-for-profit organisations
- Public sector organisations
- Research and Technology Organisations (RTOs)
Project Requirements: Your project must:
- Have a total eligible grant funding request between £2.5 million and £25 million.
- Be a minimum of 50% match funded (e.g., if you request £2.5 million grant, your total eligible project costs must be at least £5 million).
- Be late-stage R&D targeting direct commercialisation at the end of the project. This means achieving Technology Readiness Level (TRL) 7-8 or Manufacturing Readiness Level (MRL) 6-7 by completion.
- Align with at least one of the three specified scope themes (detailed in the 'Scope and Focus' section).
- Last between 18 and 36 months.
- Carry out all project work in the UK.
- Intend to exploit the results from or in the UK.
- Start by 1 March 2026 and end by 28 February 2029 (projects must always start on the first of the month).
Financial Standing: Innovate UK cannot award funding to organisations considered to be in financial difficulty. Financial viability checks will be conducted.
Exclusion Criteria: Projects that will not be funded include those that are:
- Focused on business processes not directly involved in the design, testing, validation, recycling, reuse, or manufacture of vehicles (e.g., back-office systems).
- Developing or integrating automated driving systems (ADS).
- Only focused on the development of clean fuels.
- Not aligned with the UK net-zero research innovations framework.
- Requesting more than 50% grant for total project costs (this is a project-level limit).
- Developing solutions such as e-Scooters or e-Bikes.
- Dependent on export performance or domestic inputs usage (due to Subsidy Control rules).
Previous Funding Considerations: You will not be awarded funding if you have:
- Failed to exploit a previously funded project.
- An overdue independent accountant's report.
- Failed to comply with grant terms and conditions.
- Overdue industrial contribution payments to the Advanced Propulsion Centre (APC).
- Outstanding sums due to Innovate UK in relation to other projects.

Application Process

Applying for the DRIVE35 Innovation Fund: Collaborate requires careful attention to detail and strict adherence to deadlines:

Application Platform: All applications must be submitted via the Innovation Funding Service (IFS) online platform.
Key Dates and Deadlines (UK Time):
- Competition Opens: 14 July 2025
- Competition Closes: 1 October 2025, 11:00 am
- Invite to Interview and Economic Feedback Issued: 31 October 2025
- Technical Feedback Issued: 5 November 2025
- Response to Economic Feedback Due: 7 November 2025, 11:00 am
- DBT Value for Money (VfM) Discussion (Provisional Call): 13 November 2025
- Response to Technical Feedback Due: 14 November 2025, 11:00 am
- VfM Changes to be Returned: 18 November 2025
- Interviews Start: 24 November 2025
- Interviews End: 28 November 2025
- Applicants Notified: 17 December 2025
- Project Start From: 1 March 2026
Application Structure: The application is divided into three main sections:
- Project Details: Background information (not scored).
- Application Questions: Scored section covering project rationale, market, collaboration benefits, innovation, management, and risks (Questions 8-14 scored by technical assessors).
- Finances: Details on project costs, organisation details, and funding (Questions 15-20 appraised by DBT economists for Value for Money).
Required Documentation and Materials (Upload as Appendices):
- For questions 8, 9, 10, 11, 12: Optional appendices (PDF, max 10MB, up to two A4 pages, legible at 100% zoom) for diagrams, charts, etc. Question 9 also allows letters of intent from potential suppliers/customers.
- For question 13 (Project Management): A project plan or Gantt chart (PDF, max 10MB, up to two A4 pages).
- For question 14 (Risks): A risk register (PDF, max 10MB, up to two A4 pages).
- For question 15 (Value for Money): A completed VfM workbook (downloaded from the application portal).
- For questions 16, 17, 18, 19, 20: Appendices with evidence and details of calculation methods.
- Crucially, do not include any website addresses or links (URLs) in your answers, as this will make your application ineligible.
Interview Stage Requirements (if invited):
- Submit a written response to the DBT economic assessment feedback (mandatory, up to six A4 pages, PDF or Word) before the provisional call date.
- Submit a written response to the technical assessors' feedback (optional, up to 10 A4 pages, PDF or Word).
- Provide a list of attendees for the interview (up to nine people from your project, ideally one from each organisation). They must be available on all published interview dates.
- Prepare interview presentation slides (Microsoft PowerPoint, no longer than 30 minutes, no more than 30 slides, no video or embedded web links).
- Email a mature draft of the collaboration agreement ahead of your interview.
- Interviews will take place at the APC in Warwick and last up to two and a half hours, including a 60-minute Q&A session.
Support and Assistance:
- Innovate UK offers guidance on reasonable adjustments for applicants with disabilities or long-term conditions. Contact them at least 15 working days before the closing date.
- General enquiries and technical support can be reached via email at [email protected] or by calling 0300 321 4357 (Monday-Friday, 9 am-12 pm and 2 pm-5 pm UK time).
- The Innovate UK Business Growth service provides fully funded, bespoke support to innovation-focused businesses (both funded and non-funded).
- Innovate UK Business Connect can assist in finding project partners.
- The Advanced Propulsion Centre UK (APC) can offer general guidance on competition rules and bid development via [email protected].
Project Implementation and Reporting: Project duration is between 18 and 36 months, with a required start by 1 March 2026 and end by 28 February 2029. Successful projects are required to provide annual records of realised and expected economic outputs to the Department for Business and Trade (DBT) and the APC.

Evaluation Criteria

Applications for the DRIVE35 Innovation Fund: Collaborate will undergo a rigorous assessment process, with scoring based on the content of your application, and in some cases, an interview. The key areas for evaluation are:

Strategic Rationale and Problem/Solution (Scored by Technical Assessors):
- How well your project supports the corporate strategy of each consortium member.
- Clear articulation of the customer problem or internal challenges your project will solve.
- Effectiveness of your proposed solution.
- Identification of business opportunities for all involved organisations.
- Value added by digital solutions to the project and wider digital strategy.
Market Opportunity and Exploitation Plan (Scored by Technical Assessors):
- Clear definition of the target market(s), including size, scale, and geographical distribution.
- A robust market exploitation strategy, including customer segmentation, sales plan, growth plans, and how barriers to entry will be overcome.
- Understanding of competitors and how your project's outputs provide a strong competitive advantage.
- Identification of target cost requirements for market success.
Collaboration Benefits (Scored by Technical Assessors):
- Detailed explanation of the financial returns and benefits for each consortium member.
- Potential for job creation or safeguarding within each member organisation.
- Development of long-lasting new skills and capabilities.
- Justification of why the consortium is essential and how it leverages capability improvement.
- Plans for knowledge sharing and forming longer-term partnerships based on project outcomes.
- How the project will unlock technical and commercial opportunities beyond its core aims and disseminate outcomes.
UK Supply Chain Impact (Scored by Technical Assessors):
- How the project will increase the consortium's access to UK-supplied content and the opportunity to increase UK 'Bill of Materials' (BOM) content.
- Impact on the sustainability and security of the UK supply chain (e.g., through clustering, localisation).
- Quantification of jobs safeguarded, created, or changed outside the consortium.
- Identification of broader benefits for businesses beyond the consortium and lasting effect of benefits.
- Contribution to reducing supply chain risk.
Innovation and Technical Approach (Scored by Technical Assessors):
- Clear identification of technically innovative elements and evidence of their innovation.
- Current development status of project elements (e.g., proof of concept).
- Targeted technical outcomes and their envisaged development status by project end.
- How resulting technologies compare to 'best in class'.
- Detailed technical steps for realisation, digitalisation tools, and test/validation activities.
- Anticipated Intellectual Property (IP), including trade secrets and patents.
Project Management (Scored by Technical Assessors):
- Clear definition of deliverables and physical outputs, with justification of quantities and responsibilities.
- Effectiveness of the project management approach, including tools and mechanisms.
- Proposed Work Breakdown Structure (WBS) and detailed project plan with milestones, gateways, links, and dependencies.
- Management of project startup, resource availability, and planned recruitment.
- Identified project sponsors, key team members, and escalation procedures.
Risk Assessment (Scored by Technical Assessors):
- Identification of main technical, commercial, market, managerial, and environmental risks.
- Feasibility and effectiveness of risk mitigation strategies.
- Consideration of critical project inputs and New Product Introduction (NPI) processes (regulatory, certification, ethical issues).
Value for Money (VfM) (Appraised by DBT Economists):
- Additionality: Why the grant funding is essential for the project to proceed and why it cannot be funded internally or through other private sources. Consideration of alternative locations if grant funding isn't secured.
- Funding Model: Clarity on how each partner is funding their share and plans for follow-on R&D and capital investments.
- Project Expenditure: Realistic and justified estimates for R&D, skills, capital, and commercialisation investments.
- Jobs: Quantified and justified numbers for jobs created or safeguarded (direct and post-project), considering productivity gains and evidence for safeguarded jobs.
- Sales and Emissions: Justification of selected vehicles in the VfM workbook, realistic sales forecasts, and assumptions for fuel/energy consumption and CO2 emissions, quantifying the project's contribution to overall emission savings.
Interview Stage (Post-Assessment):
- Successful applicants will be invited for an interview at the APC in Warwick. This involves a presentation (max 30 mins, 30 slides, no video/embedded links) and Q&A. The interview score supersedes initial assessment scores.
- Applicants must submit written responses to both economic and technical assessor feedback prior to the interview.
- A mature draft of the collaboration agreement must be emailed ahead of the interview.
Portfolio Approach: Innovate UK employs a 'portfolio approach' meaning they aim to fund a variety of projects across different strands, themes, technologies, and maturities. Even high-scoring projects may not be funded if they do not fit the desired portfolio balance for the competition.

Compliance & Special Requirements

Compliance and adherence to specific regulations and requirements are critical for the DRIVE35 Innovation Fund: Collaborate:

Regulatory Compliance:
- UK Sanctions: Innovate UK will not fund or provide financial benefit to any individual or entity involved with UK Sanctions. Applicants must ensure compliance with all UK Sanctions.
- Permits and Licences: You must have all necessary permits and licences in place by your project's start date. Applications without these will not be funded.
- Subsidy Control: Funding is provided in line with the Subsidy Control Act 2022. This award is classified as a Subsidy and does not form part of your Minimal Financial Assistance or De Minimis allowance. You are responsible for ensuring your funding is compliant with all current Subsidy Control legislation in the UK.
- Financial Health: Innovate UK will conduct financial viability and eligibility tests. Organisations deemed to be in 'financial difficulty' will not be awarded funding.
- Animal Welfare: If your project involves animals or animal testing, it must adhere to the highest standards of animal welfare and comply with UKRI guidance. Additional information on welfare and ethical considerations will be requested if your project is selected for funding.
- Trusted Research and Innovation (TR&I): Applicants must disclose if their proposed work relates to UKRI's TR&I Principles, including any dual-use applications, relevance to the 17 areas of the UK National Security and Investment (NSI) Act, export control license requirements/status, and items on the UK Strategic Export Control List.
Data Protection and Privacy: Information submitted during the application process, including personal and commercial data, may be shared between Innovate UK, the Department for Business and Trade (DBT), and the Advanced Propulsion Centre UK (APC). This sharing is governed by data protection legislation (UK GDPR and Data Protection Act 2018) and formal data sharing agreements.
Intellectual Property (IP): While not explicitly detailing IP policies, the application requires you to describe any expected resulting IP, including trade secrets and patents, as part of your technical approach.
Risk Management: A comprehensive risk assessment is mandatory. You must identify main project risks (technical, commercial, market, managerial, environmental) and detail how you will mitigate them. A risk register must be submitted as an appendix.
Special Conditions and Considerations:
- Consortium Structure: Beyond the mandatory requirements (UK business lead, UK SME, UK vehicle manufacturer/Tier 1 supplier), the consortium must include rationale for collaboration and describe its structure in the application.
- Project Location: All project activities and exploitation of results must strictly occur within the UK.
- Subcontractors: While allowed, overseas subcontractors require a strong justification demonstrating why UK subcontractors could not be used (cost savings alone are not sufficient).
- Previous Application Resubmission: You can re-apply once with a previously submitted proposal if it reached the assessment stage, provided it is not 'materially different'.
- Post-Award Obligations: As a condition of grant funding, you must provide annual records of the realised and expected economic outputs your project has produced to DBT and APC. Project monitoring and meetings will involve representatives from Innovate UK, DBT, and APC.
- Financial Conduct: Innovate UK may withhold grant payments if you have outstanding sums due from other projects, have failed to exploit a previously funded project, have an overdue independent accountant's report, or have failed to comply with previous grant terms and conditions.

Grant Details