How EU Cleantech Companies Can Enter the UK Market with Government Co-Funding: A Guide to DRIVE35 Partnership Structures

If you are a European company with proven zero-emission vehicle technology — a battery system, an electric drive, a recycling process, an automation platform, a specialist vehicle — the United Kingdom is probably on your expansion map. What is less well known is that the UK government will co-fund a substantial part of the cost of bringing your technology into UK production, and that you can access that funding without establishing a UK subsidiary.

This guide explains how the structures work. It is written from the perspective of a UK engineering partner, because that is what we are: DevSpark is a UK-registered engineering consultancy that builds exactly these partnerships.

What DRIVE35 is

DRIVE35 — "Driving Research and Investment in Vehicle Electrification" — is the UK government's flagship funding programme for zero-emission automotive technology: a £2.5 billion commitment running to 2035, led by the Department for Business and Trade and delivered through the Advanced Propulsion Centre (APC) and Innovate UK. It funds projects across the maturity spectrum:

Mobilise supports early-stage UK SMEs with grants of up to £180,000 plus a structured accelerator of business support from the APC and Zenzic.

Demonstrate funds working product or process demonstrators built in under 12 months — real-world testing of technologies at mid-range technology-readiness levels.

Collaborate is the flagship: consortium R&D projects with grant requests of £2.5 million to £20 million, minimum 50% match-funded, over 18–36 months, targeting genuine industrialisation. Rounds recur regularly — Collaborate 1, 2 and 3 have already run.

The Scale-up Fund sits above them: grants of £2.5 million to £20 million to move a proven technology into volume UK manufacturing.

In every case the grant covers up to 50% of eligible project costs, with the consortium contributing the rest. Projects must address zero-emission vehicle technology, manufacturing competitiveness, connected and automated mobility, or automotive software — and the funded work must be carried out and exploited in the UK.

The three ways a non-UK company can participate

1. Non-funded partner — the light-touch route. The competition rules explicitly allow non-funded partners, and they can be UK, EU or other non-UK organisations. As a non-funded partner you join the consortium, contribute your technology and expertise, work from your home country, and may exploit results outside the UK. You receive no grant money — but your costs count toward the project's total eligible scale, and you gain a co-funded route into the UK market: the expensive work of adapting, integrating, validating and industrialising your product for UK customers is carried by the funded UK partners, half-paid by the UK government. No UK entity, no UK payroll, no UK audit obligations.

2. UK subsidiary — the committed route. If you already have, or are ready to establish, a UK-registered entity, that entity can claim grant funding directly, provided it performs its project work in the UK and exploits the results from the UK. Foreign ownership is no obstacle — the funding portfolio includes UK operations of Dutch, American, Finnish and Japanese-owned companies. What matters is where the value lands, not where the shareholders sit.

3. Overseas subcontractor — the narrow route. A consortium can buy your services as a subcontractor, but must justify why no UK supplier could do the work — and "cheaper" is explicitly rejected as a justification. This is the weakest position and rarely the right one.

What a winning consortium looks like

Collaborate consortia follow a consistent recipe: a UK-registered lead; a vehicle manufacturer or Tier-1 supplier as anchor; at least one other grant-claiming UK organisation; often a university or research organisation; and, where relevant, international partners contributing technology. The eligibility rule is simple — the lead and at least one other partner must claim funding, while everyone else, including your EU company, can be non-funded. Recent funded projects pair major OEMs with small UK technology companies.

Assessors fund projects that answer three questions convincingly: what physical thing exists at the end; what carbon does it avoid; and what UK manufacturing capability and jobs does it create. A proposal that reads "European product, lightly localised" will fail. A proposal that reads "European partner brings component X; the UK consortium develops, adapts and industrialises it here, creating UK intellectual property and production" is precisely the pattern being funded.

Why this is attractive right now

The UK automotive sector needs new supply-chain capability and has public money committed through 2035 to build it — the most recent DRIVE35 allocations alone put roughly £65 million into automotive technology projects, matched by industry to nearly £130 million and supporting more than 1,800 jobs. For an EU company, that means your market entry can be co-financed at the moment the market is being formed.

For Swiss companies — who face limited access to EU framework funding — the same door is open: the rules admit UK, EU and other non-UK organisations as non-funded partners alike. It is the same logic that runs through the separate UK–Switzerland bilateral R&D programme jointly funded by Innovate UK and Innosuisse.

The pattern is proven at every scale. The companies that move early get the anchor partners; the OEM and Tier-1 slots in any given technology area are finite.

What the process actually involves

Realistically: a pre-application conversation with the APC (they actively support consortium building); shaping the project so the UK value capture is unambiguous; assembling the UK side — lead, anchor OEM or Tier-1, funded SME; and a competition application with interviews. From first conversation to project start is typically two round cycles. The winning move is to start building the consortium before the round you intend to enter.

Where DevSpark fits

DevSpark is a UK-registered engineering consultancy specialising in robotics, machine vision, and embedded and safety-rated control systems, with more than a decade of industrial automation background. For a European technology company, we act as the UK side of the equation: the UK-registered partner, the integration and industrialisation engineering, and the consortium building — so you can enter the programme as a non-funded partner with minimal overhead.

One category we are watching closely is automated EV battery disassembly — a fast-moving, DRIVE35-funded area that needs exactly this mix of robotics, vision and safety engineering.

If your technology fits the zero-emission vehicle supply chain and the UK is on your roadmap, contact us for an initial conversation. We will tell you honestly whether the funding route fits your case.

Sources: Advanced Propulsion Centre (DRIVE35 Mobilise, Demonstrate, Collaborate and Scale-up Fund pages); Innovation Funding Service DRIVE35 Collaborate competition briefs (non-funded and international-partner eligibility); UK Government DRIVE35 launch (£2.5bn programme to 2035); APC award announcements, 2026. This article is general information, not professional funding, legal or tax advice. Competition rules are set per round by the APC and Innovate UK — verify current criteria in the official competition brief before committing resources.