Jaguar Land Rover nets £340m eco loan
Full hybrids, which can run on battery power alone, are part of the plan, along with micro hybrids that recapture lost energy under braking.
The loan from the European Investment Bank will also be used to develop more efficient car bodies.
Ravi Kant, Tata Motors' vice chairman, said: 'This will support the progress of the turnaround at Jaguar Land Rover. We view Jaguar Land Rover as a key part of Tata Motors and we feel confident about its outlook for the future.'
The money could help to secure development jobs in the UK, although it has already been announced that production at the Castle Bromwich or Solihull factories will end by 2015.
The forthcoming Range Rover LRX will be built at the Halewood factory in Merseyside, however. Land Rover is aiming for CO2 emissions of less than 150g/km for all LRX models, as well as a hybrid capable of more than 60mpg with CO2 emissions of less than 120g/km.