The £22m Proving Factory - at sites in Rotherham and Coventry - is now open for business, following an official launch by business secretary Dr Vince Cable.
The scheme aims to take low-carbon technologies and ‘industrialise’ them for car makers.
A component manufacturing plant has been opened at Tata Steel’s Brinsworth site, while assembly will be in Coventry.
More than 50 people have been recruited, set to increase to 250 over the next four years.
Vince Cable said: “When I visited Rotherham two years ago I was standing in an empty shed, talking about a great idea.
“Now, with £13m support from government, that idea has been transformed into state-of-the-art machines, new jobs and a host of technologies that will help produce the next generation of low carbon vehicles.
“The government’s industrial strategy is backing the automotive sector as it goes from strength to strength, giving business the confidence to invest over the long term and helping to develop cutting-edge technology that will create high-skilled jobs.”
The Proving Factory was established to bridge a gap between developers designing low-carbon technologies and car makers’ need for volume production. Nine technologies have gone through the development stages, with two due to start production this quarter.
The Proving Factory business is a strategic alliance between Productiv and Tata Steel.
Henrik Adam, chief operating officer at Tata Steel, said: “As well as supporting the development of new technologies for the automotive industry, we are setting a benchmark for efficient production leading to the design of novel materials.”