Nine companies around the North have won backing from the Drive35 programme

Northern companies have shown how the region is playing a major role in the switch to electric vehicles after securing Government backing for their work.

Nine companies around the region – including the giant Nissan plant at Sunderland – have won backing from the Government’s £4bn Drive35 programme, which is intended to speed up the electrification of the car industry. Officials at the Department for Business, Innovation, Science and Trade said the funding would support hundreds of jobs.

Among those benefitting are Gateshead’s Turntide Technologies for a £17m project to accelerate the production of new flux motors, and Manchester’s Watercycle Technologies, which has secured £3m to demonstrate how lithium for vehicle batteries can be recovered from waste.

Themulon, in Sedgefield, County Durham; Nexperia UK and Gravis Robotics, both in Stockport; Electra Commercial Vehicles in Brighouse; and Xerode, Aftrak and Cybass, all in Sheffield; have also secured financial backing.

Industry minister Blair McDougall said: “Britain invented the modern motor industry and we’re determined to ensure the next generation of vehicles are designed and built here too.

“This investment will secure skilled jobs, strengthen our manufacturing heartlands and help drive the reindustrialisation of Britain.”

As part of its project, Turntide will expand the use of its Gateshead production and R&D campus while reestablishing a dedicated component and validation facility in Cramlington, Northumberland. The company said the project would help it create new jobs.

CEO Steve Hornyak said: “Project Supreme is an important step in scaling next-generation electric motor technology production in the U.K. for the global market. By enabling high volume axial flux motor production through automation and overall cost reduction, we’re driving wider adoption of more efficient, lighter electric powertrains across automotive and industrial applications.”

At Watercycle Technologies, co-founder Dr Ahmed Abdelkarim said: “ReLiVE directly supports the UK’s ambition to build a secure, domestic supply of battery-grade lithium. The Government’s Critical Minerals Strategy sets a clear goal to establish large-scale UK lithium production and reduce our reliance on imports.

“By demonstrating that high-purity lithium can be produced from circular, low-carbon sources here in the UK, ReLiVE can help turn that ambition into reality. It shows how British innovation can support the transition to zero-emission transport while building the strategic capabilities the country needs for a more resilient battery supply chain.” for a more resilient battery supply chain.”

ReLiVE represents a significant step in scaling Watercycle’s technology from pilot operations towards commercial lithium production, demonstrating a circular approach to lithium refining at a scale not yet seen in the UK.

The Government has said it intends to phase out the sale of new petrol and diesel cars by 2030 as part of efforts to cut emissions and tackle climate change. Reports have suggested ministers are considering watering down the target in order to ease the cost of living, but a Government spokesperson insisted they were “committed to the 2030 phase-out date”.

Shadow transport secretary Richard Holden said the Government should abandon the 2030 target.

Digital sovereignty has gone – relatively quickly – from being a niche policy interest, to a mainstream business consideration across multiple regions of the world.

One of the most outspoken players has been the European Union, with its Gaia-X initiative, a wave of binding regulation, and a series of high-profile procurement decisions.

The combination of these changes made it unequivocally clear that the question of who controls critical data infrastructure is no longer a theoretical debate. Awareness of what has actually changed (and what this change means in practice) is becoming increasingly relevant for any business working across borders.

From summits to something tangible

The first European Summit on Digital Sovereignty was convened in November 2025 with the initiative of France and Germany. It brought in politicians, regulators, and industry leaders with the goal of mapping out concrete commitments instead of position papers.

A joint task force on digital sovereignty was produced as a result of this summit, due to report back in 2026. Meanwhile, Gaia-X released its Trust Framework 3.0 that enabled federated trust structures across borders and sectors.

The figures revealed during this summit are more telling than the announcement itself. Gaia-X now counts more than 15 operational data spaces, which is a noticeable difference from the long list of projects that were previously only known as “in preparation.” Cloud Temple became the first provider that got certified at the highest sovereignty label of this initiative.

Corporate procurement has also begun to follow the same route. Airbus issued a tender worth more than €50 million to migrate mission-critical environments to a sovereign European cloud. BMW continues its expansion of the Catena-X data-sharing network. Germany’s armed forces have signed a seven-year-long contract with the purpose of using an open-source alternative to replace Microsoft 365.

While none of this can be treated as the EU being on par with the American hyperscalers, it is an indication of procurement decisions and infrastructure investments being made based on security concerns, not just policy statements.

Why “stored in Europe” is not the same as “sovereign”

There is an important distinction relevant to this topic: where data is stored physically is not the same as whose laws govern it.

For example, AWS launched a European Sovereign Cloud in Brandenburg in January 2026. It’s structured as a standalone German entity with EU-based executives and an investment fund of several billion euros behind it. On paper, it resembles exactly the kind of cloud storage European regulators have been looking for. In reality, the parent company of AWS is still American, meaning that the US CLOUD Act still applies – allowing US authorities to compel American companies to hand over data they control at any point in time.

The chief executive of Gaia-X has been very blunt on this topic, clearly stating that the highest level of sovereignty can only be achieved by providers that have their headquarters on European soil. If the service is run by a US company (even with European staff and data centers), it’s still subject to American legislation.

This single factor cannot be considered a mere technicality. It’s significant enough to be the difference between a compliance checkbox and a genuine answer to a question of who can access this data and under what authority.

What it means for business decisions

Sovereignty is no longer a question that can be stalled indefinitely from the business side. Not only the EU Data Act has been in force since September 2025, but there are also multiple sector-specific rules (such as DORA for finances and NIS2 for critical infrastructure) that are tightening the same constraints, as well. None of these regulations treat sovereignty as optional.

According to survey data from Germany’s Bitkom, there are already many businesses around the globe that want independence from foreign infrastructure but have not acted on these wishes yet, despite the trust in some foreign providers having fallen sharply recently. This specific gap between intention and action is exactly where all the rushed and expensive decisions come from – mostly under regulatory pressure instead of a considered timeline.

In this context, there are a few basic questions that are worth raising as early as possible from the business side: where does data actually reside, and under whose jurisdiction; what do existing cloud contracts say about data access requests from foreign authorities; and were a rapid migration away from a provider necessary, would it actually be possible?

The recovery question most discussions overlook

Most discussions about digital sovereignty work from determining where data lives day by day: including specific cloud providers, specific data centers, and the specific jurisdiction it works under. These are legitimate questions, but they address only the visible layer of a much deeper dependency.

Sovereignty, properly understood, also requires control over what an organisation can recover from when infrastructure fails – and this dimension is one that policymakers have been slower to address than the infrastructure and regulatory questions that tend to dominate the conversation.

The gap is significant. Regulatory frameworks such as the EU Data Act, NIS2, and DORA establish requirements around data residency, access controls, and operational resilience, but they leave the specifics of backup architecture and recovery sovereignty largely to individual organisations to determine. A business can be fully compliant on paper while remaining entirely dependent on a foreign vendor’s proprietary backup infrastructure – one it cannot fully audit, migrate away from, or recover independently in a crisis.

This is precisely the argument that backup and recovery vendors have begun to make recently. Swiss company Bacula Systems describes this logic as “sovereign recovery” – the idea that a sovereign cloud strategy at a given moment is only going to be as resilient as the recovery infrastructure it works under.

Whenever a backup data is stored in an environment the organization does not have a full control over, created using formats that are problematic migration-wise, or tied to the infrastructure of an individual vendor – the validity of sovereignty claims becomes significantly less absolute and may not hold up under real pressure.

Irrespective of whether or not a given vendor’s approach is going to suit a particular organization, the overall point still stands. Cloud provider selection has been dominating the sovereignty conversation, while the recovery layer has received a lot less scrutiny in comparison.

The whiteboard phase is over

None of these arguments mean that all the existing infrastructure should be disassembled overnight. No serious case is being made for businesses to sever all ties with their current “foreign” technology. However, it does increase the likelihood that businesses treating digital sovereignty as someone else’s problem are the ones that are most likely going to have to make some rushed decisions under regulatory pressure within the next year or two.

The policy debate has finally moved on from abstract principles to creating practical operational data spaces, substantial procurement tenders, and binding regulations. This change is the reason why most businesses cannot simply consider sovereignty as an optional topic – as they now have to think whether they have established where their data resides, who has access to it, and what they are going to recover from if the need to do so arises.