NAA Member News: Brabners – From funding to production, how automotive businesses can capitalise on new government support
Christine Hart, legal director in Brabners’ employment, pensions and immigration team, outlines the key legal, commercial and workforce considerations for automotive businesses looking to make the most of public funding.
The Prime Minister recently announced a £130 million investment in the next generation of UK automotive technology, supporting projects ranging from cheaper electric vehicles to developed self-driving systems.
For manufacturers and suppliers, this is a welcome boost at a time when the sector is managing the cost of electrification alongside regulatory change. The latest awards have already been made, but the opportunity extends beyond these recipients. Funded projects will need specialist suppliers, testing capability and manufacturing support.
The funding also forms part of DRIVE35, the government’s long-term programme to support zero-emission vehicle manufacturing through to 2035. With £4 billion of capital and R&D funding available, businesses should be considering where they can add value, whether through developing components, supporting scale-up or helping funded technologies reach commercial production.
However, government support should not be treated as free money. Public funding comes with conditions that can shape how a project is developed and commercialised. Whether acting as a grant recipient, supplier or partner, businesses need to understand those requirements from the outset.
Funding conditions
The first point for any grant recipient is to understand exactly what the funding can be used for.
Funding agreements are likely to set out eligible costs and reporting requirements. So, if a business misses a milestone, spends outside the agreed scope or fails to provide the right evidence, funding could be delayed or reduced.
Technology projects can also be unpredictable. A product may need further testing, a supplier could fall behind, or production costs may increase beyond the original assumptions. Businesses should make sure they have the governance in place to track spending and keep a clear audit trail.
This matters for suppliers too. Even if they aren’t the direct grant recipient, their work may need to support the recipient’s funding obligations. Contracts should be clear on what information must be provided and what happens if delays affect the wider project.
Collaboration, IP and data
Many funded automotive projects will involve collaboration between manufacturers, suppliers, universities and technology specialists. While this can accelerate innovation, it also creates questions around ownership and commercialisation.
Before work begins, parties should be clear about what technology each partner is bringing into the project and who will own any new intellectual property created. It’s also important to know how IP can be used beyond the trial phase, particularly where a supplier develops a component or system with wider applications.
Data should be dealt with in the same agreements. Self-driving technology and charging infrastructure, for example, rely on the collection and use of data. Contracts should set out who can access that data, how it can be used and what security obligations apply.
A successful trial is only valuable if the parties understand how the technology can be rolled out at scale. Collaboration agreements should therefore address future commercial use from the outset.
Prototype to production
Public funding can help businesses develop promising technology, but moving from prototype to production brings greater scrutiny.
A product that performs well in a controlled trial may still need further work before it can be manufactured consistently and placed on the market. Businesses should plan early for the testing and approval process needed.
This is particularly relevant for EV and automated driving systems. Where several businesses are involved in developing a system, responsibility for compliance and ongoing testing should be clearly allocated.
Compliance shouldn’t be left until the end of the project. Building regulatory requirements into development from the outset can help businesses avoid delay and disputes before commercial launch.
Workforce and delivery
Funding can support innovation, but businesses still need the people and processes to deliver it.
New technology projects may require skills in evolving areas such as battery engineering and advanced manufacturing. Employers should consider whether they can meet those needs through upskilling existing teams or targeted recruitment.
Where a project changes the way a business operates, there may also be workforce implications. New production processes may affect shift patterns or job roles. If changes are needed, employers should communicate clearly and engage with staff early.
This is especially important when a funded project moves from research and development into commercial production. Scaling up can place pressure on teams originally structured around trial activity, so workforce planning should sit alongside commercial planning from the start.
Route to market
The final challenge is turning a funded project into a viable commercial product.
A successful trial doesn’t guarantee manufacturing capacity, customer demand or the right commercial partnerships. Businesses should think early about how the product will reach market and what investment may be needed once the funded phase ends.
Contracts should also address what happens if circumstances change. A project partner may withdraw, or costs may rise during a longer-than-expected launch. Setting out how changes, withdrawals and future funding will be handled can help reduce the risk of disputes.
For suppliers, supporting a funded project may create a route into a long-term customer relationship, but it can also involve upfront investment. Businesses should understand the likely route to future orders before committing significant resource.
What’s next
The latest funding is a positive signal for the UK automotive sector, creating opportunities beyond the businesses receiving awards.
However, the businesses best placed to benefit will be those that treat funding as the beginning of a commercial journey, not the end goal. Public investment can help technology move forward, but legal readiness and route-to-market planning will determine whether innovation can scale.
As DRIVE35 continues, automotive businesses should review where they can contribute and whether their processes are ready for funded projects. They should also ensure they are protecting their position when entering new collaborations.
At Brabners, we’re helping automotive businesses navigate these issues, from reviewing funding arrangements to advising on regulatory compliance and workforce risk. To discuss how Brabners can support your business, contact Christine Hart at christine.hart@brabners.com.
