An estimated £56million of public and private funding has been made available to support low carbon transport projects.
The Technology Strategy Board, the UK’s innovation agency, said the money will be invested in 17 major research and development projects and many will be led by car manufacturers such as Ford, Jaguar and Land Rover.
They are expected to cut carbon emissions from road transport and drive commercialisation of low carbon vehicles in the nation.
Transport Minister Norman Baker MP said: “Accelerating the commercialisation of low carbon vehicle technologies will help to achieve our challenging climate change targets as well as creating new jobs and increasing opportunities for UK businesses on the world stage.”
One of the projects includes plans for a production-ready hybrid bus by 2014, which is expected to cut fuel emissions by 15%.