Mercedes-Benz has placed a significant vote of confidence in the UK’s advanced manufacturing sector after confirming a £20 million partnership to develop high-performance electric vehicle technology, creating 150 skilled jobs across Northamptonshire and Oxfordshire.
The German manufacturer will invest £10 million of its own capital, matched by a further £10 million from the UK government, to develop next-generation high-power drive systems for electrified and hybrid performance cars. Crucially, the work will draw on Formula 1 engine technology from Mercedes’ world-leading High Performance Powertrains division, headquartered in Britain’s motorsport heartland.
The project brings together Mercedes-Benz and a cluster of UK engineering SMEs, forming a new industrial supply chain intended to move the technology from prototype to production within three years — a timeline that underscores the pace of innovation in the performance EV race.
Announced during the state visit of German president Frank-Walter Steinmeier, the partnership is framed as a strategic moment for both countries. For Britain, it represents fresh inward investment at a time when the automotive sector is grappling with global competition, supply chain pressures and the transition to net zero. For Germany, it secures access to the UK’s unrivalled expertise in high-performance electrification and motorsport engineering.
Business secretary Peter Kyle said the deal demonstrates the depth of Anglo-German industrial ties and highlights the UK’s capability in cutting-edge EV development.
“This investment demonstrates the strength of our partnership with Germany in driving innovation and creating good jobs across our communities,” Kyle said. “By keeping advanced manufacturing expertise here in the UK, we’re building the supply chains and skills that will power our auto industry for decades to come.”
The new technology aims to deliver the holy grail for performance-led brands: combining zero-emission driving with the power, responsiveness and refinement expected of Mercedes-Benz’s premium models. As consumer appetite for luxury EVs grows — and regulatory pressure intensifies — carmakers are accelerating investment in propulsion systems that distinguish their vehicles in an increasingly crowded market.
The 150 new roles will support engineering, testing and low-volume production, with 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 commercial opportunities.
For Britain’s automotive sector — still recovering from years of uncertainty — the Mercedes-Benz investment sends a clear signal: UK high-value manufacturing remains competitive on the global stage, and performance electrification is an area where the country can continue to lead.
