Mercedes-Benz has confirmed a £20 million investment in the UK to develop high-performance electric vehicle (EV) technology, creating 150 skilled jobs across Northamptonshire and Oxfordshire. The German manufacturer will contribute £10 million, with the UK government matching the amount, to advance next-generation high-power drive systems for electrified and hybrid performance cars.
The project will draw on Mercedes’ Formula 1 engine expertise from its High Performance Powertrains division, based in Britain’s motorsport hub. Engineers from the company will work alongside a cluster of UK small and medium-sized enterprises (SMEs) to form a new industrial supply chain, aiming to move the technology from prototype to production within three years.
The partnership was announced during the state visit of German President Frank-Walter Steinmeier and is being described as a strategic milestone for both nations. For the UK, it represents a boost to inward investment at a time when the automotive sector faces global competition, supply chain pressures, and the transition to net zero. For Germany, the deal secures access to Britain’s advanced expertise in high-performance electrification and motorsport engineering.
Business Secretary Peter Kyle said the investment highlights the strength of Anglo-German industrial ties and the UK’s capabilities 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 is designed to combine zero-emission performance with the power, responsiveness, and refinement expected of Mercedes-Benz’s premium vehicles. As demand for luxury EVs grows and regulatory requirements tighten, manufacturers are increasingly focusing on propulsion systems that differentiate their models in a competitive market.
The 150 new roles will cover engineering, testing, and low-volume production, with potential for expansion as the technology develops. For participating SMEs, the project offers access to international supply chains and long-term commercial opportunities.
The investment underlines the UK’s ongoing relevance in high-value automotive manufacturing, particularly in the performance EV sector. For a market still recovering from years of uncertainty, Mercedes-Benz’s move sends a clear signal that Britain remains a competitive location for advanced engineering and electrification innovation.
The partnership positions the UK as a key centre for next-generation performance EV technology, blending motorsport expertise with cutting-edge electrification, and securing opportunities for skilled engineers and businesses across the country.
