The South Korean government said it would provide up to KRW386bn (US$326m) in grants to help fund the development of eco-friendly automotive technologies by 2026, according to local reports.
The ministry of trade, industry and energy said it would make the funds available to small and medium size companies to help support the development of clean automotive technology.
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In particular, it was looking at projects focused on the development of new technology relevant to electric vehicles (EVs) or hydrogen fuel cell electric vehicles (FCEVs).
This was part of a broader government policy of reducing the country's dependence on fossil fuels in favour of sustainable energy sources.
It was targeting 33% of total new passenger vehicle sales in the country to be either EVs or FCEVs by 2030, up from just 2.6% in 2019.
In a statement, the ministry said "amid a change in the industrial paradigm in the automobile industry, this project will help South Korean automakers better compete with global rivals".
Some of the key areas the ministry wanted to target include faster battery charging and increased range per charge. The government was also investing heavily to make the country's road infrastructure able to accommodate self driving vehicles by 2027.
