Mercedes-Benz has given a major vote of confidence in the UK’s advanced manufacturing sector after confirming a £20m partnership to develop high-performance electric vehicle technology and create 150 skilled jobs in Northamptonshire and Oxfordshire.
The German manufacturer will invest £10 million of its own capital and a further £10 million from the UK government to develop next-generation high-performance drive systems for electric and hybrid cars. Crucially, the work will rely on Formula 1 engine technology from Mercedes’ world-leading High Performance Powertrains division, based in the British motorsport highlands.
The project brings together Mercedes-Benz and a group of British engineering SMEs, forming a new industrial supply chain that aims to take the technology from prototype to production within three years – a timeline that underlines the pace of innovation in the race for high-performance electric vehicles.
The partnership announced during the state visit by Federal President Frank-Walter Steinmeier is described as a strategic moment for both countries. For the UK, this represents a new inward investment at a time when the automotive sector is struggling with global competition, supply chain pressures and the transition to net zero. For Germany, it secures access to unsurpassed British know-how in high-performance electrification and motorsport technology.
Business Secretary Peter Kyle said the deal showed the depth of Anglo-German industrial ties and underlined Britain’s ability to develop cutting-edge electric vehicles.
“This investment demonstrates the strength of our partnership with Germany in driving innovation and creating good jobs in our communities,” said Kyle. “By retaining our advanced manufacturing expertise here in the UK, we are building the supply chains and capabilities that will power our automotive industry for decades to come.”
The new technology aims to deliver the holy grail for performance-focused brands: combining zero-emission driving with the performance, responsiveness and refinement expected from Mercedes-Benz’s premium models. As consumer demand for luxury electric vehicles increases and regulatory pressure increases, automakers are investing more in propulsion systems that will make their vehicles stand out in an increasingly crowded market.
The 150 new positions will support development, testing and small-batch production and have the potential to scale further as the technology matures. For SMEs involved in the project, the partnership offers access to global supply chains and long-term business opportunities.
For the UK automotive sector, still recovering from years of uncertainty, Mercedes-Benz’s investment sends a clear signal: high-quality British manufacturing remains competitive on the global stage, and high-performance electrification is an area where the country can continue to lead.
