Korean carmakers have signed up to a government initiative to develop mid-size electric vehicles, a project aimed at rolling out cheaper, eco-friendly and better-performing cars by 2014.

A consortium led by Hyundai Automotive Group, has signed a deal with the Ministry of Knowledge Economy to establish production lines by 2014, moving up the due date by three years, the ministry said.

The ministry said it plans to fund KRW70bn (US$64.8m) over the coming three years for the initiative, and Hyundai and its 43 partners will inject at least KRW30bn collectively.

Other consortium members include SK Innovation, LG Chem and Hyundai Mobis along with smaller and mid-sized firms such as C&S Technology and Wise Automotive. Also involved are research institutes and universities such as Korea Electronics Technology Institute, Seoul National University, KAIST and Sungkyunkwan University.

The ministry said the project will serve as the cornerstone for Korea to become “one of the world’s four auto giants and one of the top three manufacturers of green cars”.

The project is aimed at localising related technology and all parts ranging from motor and batteries to power converters and charging stations. It is also part of the “Green Car Development Plan” the government unveiled in October.

Under the plan, the ministry wants to improve poor performance and affordability, which experts have pointed to as problems with local electric vehicles.

Last year, Hyundai developed the country’s first compact electric vehicle, the BlueOn. It can run up to 140km per charge but falls short of the Nissan Leaf’s 160km and the Chevrolet Volt’s 610km.

Hyundai and Kia have also introduced other products such as the Elec-City and i10. Kia is expected to reveal a new compact utility vehicle by the end of the year.

Starting 2020, South Korea plans to produce about 1m electric vehicles a year, 700,000 of them for export.