Jaguar and Land Rover's managing director has called on the Government to provide cash for car makers to invest in developing green technology.
David Smith wants the UK Government to follow the lead of the USA, where car makers will receive $25 billion for investment in green technology by the car industry.
'If the US needs to take a bold move we do, too, and the quicker the better,' said Smith.
His calls were echoed by Ford of Britains chairman, Roelent de Waard, who called on the Government to reinvest some of the revenue it gets from vehicle taxes back into the industry.
'There is a great opportunity to boost demand for greener vehicles and this can be done through Vehicle Excise Duty and VAT reductions for dedicated incentives,' he said.
Smith also called for the Government to cut taxes to boost confidence in the entire car industry.
The UK motor industry is the countrys largest industrial employer, but sales are plummeting as fears of a recession grow.