Rachel Reeves is preparing to channel tens of millions of pounds of public money into a British self-driving technology company as Labour moves to accelerate the rollout of autonomous vehicles on UK roads.
The £28bn National Wealth Fund (NWF), backed by the Treasury, is understood to be close to agreeing a major investment in Oxa, the Oxford-founded driverless vehicle start-up previously known as Oxbotica. The business was established in 2014 by Oxford University academic Professor Paul Newman and was the first company to trial autonomous vehicles on UK roads in 2016.
Oxa has raised more than £180m from private investors to date and focuses on developing software that can make existing vehicles autonomous, rather than manufacturing cars itself. Its technology is already used in driverless shuttle buses and industrial and logistics vehicles, positioning it as an infrastructure player in the emerging autonomous ecosystem.
The proposed investment would come via the National Wealth Fund, launched by Labour in 2024 as the successor to the UK Infrastructure Bank. While operationally independent, the fund is designed to support the government’s growth and industrial strategy, typically making direct investments of £25m to £50m to crowd in significantly larger sums of private capital.
Backing from the fund would mark one of the government’s most substantial direct bets on an artificial intelligence business to date, and would align with plans to begin trials of driverless taxis and buses on British roads later this year. Ride-hailing groups Uber and Lyft have already confirmed their intention to test autonomous vehicles under the UK’s new regulatory framework, while Tesla continues to pilot its Full Self-Driving software in Britain. Another UK firm, Wayve, which has raised more than £1bn, is also preparing public trials through a partnership with Uber.
Oxa’s latest funding discussions follow a £15m injection from existing backers in December, including BP’s venture capital arm, alongside talks over a further “frontier AI” investment round. In September, Nvidia chief executive Jensen Huang publicly praised the company as an “incredible autonomous driving business” and signalled interest in investing in its next round.
However, the company has faced financial pressures. IP Group, an early investor, revealed last year that it had cut Oxa’s valuation by around two-thirds to £120m, reflecting mounting losses and tougher market conditions for deep-tech start-ups.
The NWF has already committed more than £200m in equity investments and billions more in debt financing for clean energy and battery manufacturing projects. In its first year under Labour, it invested £3.6bn as part of the government’s wider effort to stimulate long-term growth.
Neither Oxa nor the National Wealth Fund commented on the prospective deal, and the Treasury declined to comment.
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Reeves set to back self-driving car firm with tens of millions in taxpayer funding