LONDON Chancellor Philip Hammond on Wednesday announced 390 million pounds of funding to boost the development of low emission vehicles and autonomous vehicles.
Delivering his first budget statement to parliament, Hammond also announced support for electric vehicle infrastructure.
"Reliable transport networks are essential to growth and productivity," he said, adding that the funding would "build on our competitive advantage in low emission vehicles and the development of connected autonomous vehicles".
He also announced a 100 percent first-year capital allowance for the installation of electric vehicle charging infrastructure.
Last month, Japanese carmaker Nissan (7201.T) said it would build two new models in Britain despite the vote to quit the EU, giving Prime Minister Theresa May her most important corporate endorsement since the Brexit referendum in June.
A Nissan spokesman said discussions were also ongoing between the firm and the government over how Britain could support and encourage the uptake of electric vehicles, a key area for the company.
Just over 3 percent of cars sold in Britain last year were alternative fuel models - primarily plug-in hybrid and electric cars - but sales have risen 23 percent so far this year, with manufacturers seeking to attract buyers in an increasingly competitive market.
The government is encouraging tech firms and carmakers to develop and test autonomous driving technology in Britain, aiming to build an industry to serve a worldwide market it says will be worth around 900 billion pounds by 2025.
(Reporting by Costas Pitas and Kylie MacLellan, Editing by Paul Sandle)