Volvo has received a €245m (£217m) loan from the EU-owned European Investment Bank (EIB), to be invested in research & development for autonomous vehicles.

The loan will be used to fund research in four development areas for autonomous or semi-autonomous cars. These include: more energy-efficient petrol engines; safety systems like collision avoidance and driver assistance; connectivity and navigation; and creating a new battery-powered vehicle by 2019.

Alexander Stubb, EIB vice-president with responsibility for Northern Europe, said: “We are happy to support a European car maker in addressing the disruptive technology shifts towards e-mobility and autonomous driving.

“Volvo Cars’ research and development projects will contribute to making their cars safer, cleaner and greener, which benefits us all.”

European Commission vice-president Jyrki Katainen said: “The Investment Plan for Europe is boosting innovation throughout Europe, and today’s announcement is yet another example.

“This research and development project by Volvo will push the boundaries of automotive technology in Europe and take us another step closer to a low carbon economy.”