Mercedes-Benz has announced a major £20million investment that will bring more than 150 new high-skilled jobs to Northamptonshire and Oxfordshire, in a boost to the UK's electric vehicle industry.
The German carmaker confirmed today that its funding package will also protect 34 existing roles in the region and forms part of wider measures for the car industry.
According to reports, £10million will be provided by the UK Government through the Advanced Propulsion Centre, which supports projects developing cleaner and electric vehicle technology.
The scheme is being led by Mercedes-AMG High Performance Powertrains, the company best known for building the engines used in Formula 1.
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The team will now turn its racing technology towards designing and developing a new generation of electric drive systems for high-performance road cars.
Ministers explained that the decision shows strong confidence in the UK's automotive sector and will help strengthen UK supply chains for electric vehicles.
They also detailed how the move cements the country's reputation as one of the leading places in the world for car engineering and innovation.
The announcement comes on the same day that Germany's President, Frank-Walter Steinmeier, arrives in the UK for a three-day state visit.
The German car brand has announced a £20million investment in the UK car industry
|PA/GETTY
Later this afternoon, he will join Prime Minister Keir Starmer and Chancellor Rachel Reeves in Downing Street for a business roundtable with senior company executives from both countries.
Both Governments are keen to highlight the growing partnership between the two nations. It follows the recently signed Kensington Treaty, which set out plans for closer cooperation across defence, trade and economic growth.
Germany remains the UK's most important trading partner in Europe, with two-way trade in goods and services worth around £150billion a year and supporting over a million jobs across both economies.
Mercedes' new investment also follows last week's Budget, which included a number of measures aimed at making Britain more attractive to major global companies. These included a three-year stamp duty exemption for firms choosing to list on UK stock markets, as well as keeping corporation tax at the lowest rate in the G7.
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The boost by Mercedes will add more than 150 jobs to the UK car sector
| PAThe new project – called IGNITED – will focus on creating a high-power electric drive unit for performance electric vehicles.
In simple terms, it is the EV version of a high-powered engine, drawing on many of the same lessons learned from Formula 1 technology. Production is expected to begin within three years.
Mercedes-AMG will work with two British companies on the project: YASA, based in Oxfordshire, and DePe Gear, based in the Midlands.
Both firms specialise in advanced electric motor and transmission technology. Tim Woolmer, founder and chief technology officer at YASA, said his company was proud to take part in what he called an important milestone for the future of high-performance electric cars.
The new project will focus on creating a high-power electric drive unit for performance electric vehicles
| MERCEDES-BENZMr Woolmer also said Government support via the Advanced Propulsion Centre had been crucial in keeping this stage of research and development in the UK and protecting specialist engineering jobs.
Prime Minister Starmer welcomed President Steinmeier to Britain and said the Mercedes project showed the real benefits of the two countries working closely together: "cutting-edge innovation, more jobs, and a stronger economy for Britain."
Meanwhile, Business and Trade Secretary Peter Kyle said the investment was a good example of how Anglo-German cooperation was helping to create employment and keep the UK at the forefront of modern manufacturing.
He said the Government's Industrial Strategy was sending a clear message to global car makers that Britain is ready to support companies willing to invest here.
Chancellor Rachel Reeves added that there was "no better place for German companies to invest, scale and stay than the UK," stressing that Europe's two largest economies could achieve even stronger growth by working side-by-side.
The Government is also backing the wider automotive sector through the DRIVE35 programme. Ms Reeves recently confirmed an extra £1.5billion for the scheme, taking total Government investment to £4billion up to 2035 – the largest public investment in Britain's car industry in history. The programme aims to support electric car manufacturing across the UK, including batteries, electric motors, hydrogen fuel technology and power electronics.