The UK Government has allocated £11 m in funding for the research and development of the carbon-cutting technologies for energy efficient vehicles.
With the funding the UK Government aims to support the growth of energy efficient vehicles and become one of the leaders in development of the technology.
The £11 m funding is being put into a competition that is being run by the Technology Strategy Board named Innovate UK.
The board has opened the competition recently and auto industry bodies had been invited to bid for a share of the funding.
UK transport minister Baroness Kramer said: "This new £11 million for research and development shows our support to UK companies leading the way to cleaner and greener transport technologies."
"They are investing in more efficient transport, and that is the best way to drive our economy forward"