Williams Advanced Engineering, the technology arm of Formula 1 team owner Williams Group, received funding from the Advanced Propulsion Centre (APC) and will make batteries for the likes of luxury carmaker Aston Martin.
"The project will further develop and make available battery systems in order to overcome significant supply chain gaps in the UK," said the APC's Director of Technology and Projects Jon Beasley.
Carmakers are racing to build greener cars and improve charge times in a bid to meet rising customer demand and fulfil air quality targets but Britain lacks sufficient manufacturing capacity, an area ministers have said they want to build up.
Nissan builds batteries and its electric Leaf model at its north of England plant in Sunderland but others have opted to build their low-emissions models elsewhere, including Britain's biggest carmaker Jaguar Land Rover.
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