The government have launched funds for automotive companies to develop more energy efficient cars.
The £75 million fund will enable businesses to make and test new low carbon technologies.
The announcement was made by Vince Cable today.
He also announced a £1.5 million project that will test driverless cars.
The 'pods' will be able to carry two people and will run on designated pathways in Milton Keynes city centre.
It is planned in 2015 that 20 pods will be driver-operated and will run on lanes separated from pedestrians.
By 2017, 100 pods will use sensors to avoid obstacles and will run alongside pedestrians.