Speaking at the Innovate11 conference and exhibition in London, the Business Secretary will say that the research and development projects funded by the investment will focus on reducing costs in the supply base and making progress in areas such as energy storage and management, and lightweight vehicle and powertrain structures.

The investment will be delivered through a funding competition managed by the Technology Strategy Board, working in concert with the Office for Low Emission Vehicles. Details of the funding competition are still to be finalised and will be announced by the Technology Strategy Board as soon as possible.

The competition is likely to open for proposals in January 2012 and will lead to investment in highly-innovative, industry-led collaborative research and development projects that will achieve significant cuts in road transport CO2, strengthen the UK's capabilities and bring low carbon vehicle technologies through onto the UK's roads more quickly.