Mercedes EV cash will create more than 150 jobs

Jobs will be created in Northamptonshire and Oxfordshire as a result of the investment

More than 150 jobs will be created in Britain as a result of a new electric vehicle (EV) project that partners with the sector in Germany.

The scheme will be led by Mercedes-AMG High Performance Powertrains which builds units used in Formula 1 cars.

The manufacturer is based in Brixworth, Northamptonshire, and jobs will also be created in Oxfordshire.

The Labour government said its announcement would "reinforce Britain's position as a global hub for automotive innovation" and it was timed for the first day of the German president's state visit.

Frank-Walter Steinmeir is in the UK for three days following the signing of the Kensington Treaty in July, which included agreement to co-operate on scientific research.

The new project, named IGNITED, will develop what was described as an "ultra-compact, high-power electric drive system" - which is similar to an engine - for high-performance EVs.

The Department for Business and Trade said it was investing £10m in the project, which is costing £20m in total.

It follows a package of measures, aimed at being pro-business, for international partners announced by the chancellor in last week's budget.

Prime Minister Sir Keir Starmer said: "By working together with likeminded leaders and countries, this government is delivering on the public's priorities and cutting the cost of living for Brits back home."

UK partners for the scheme include YASA Ltd and DePe Gear Company Ltd, with production expected within three years.

YASA founder Tim Woolmer said the partnership was an "important milestone for the future of high-performance electric drive technology".