Jaguar Land Rover is set to recruit thousands more staff in the next year after securing £70 million from the RGF.
The money will go towards two research and development projects which will help to secure an extra £1.3 billion worth of investment for the motor industry.
In recent months the company has revealed plans to take on 1,000 more engineers, increase its workforce at its Halewood plant by 1,500 and invest £100 million into an advanced facility at Warwick Manufacturing Group (WMG).
Chief executive Dr Ralf Speth said: “Jaguar Land Rover is the leading investor in UK automotive R&D and has ambitious growth plans.
"We are spending millions of pounds on research – for example a £100 million investment in an advanced facility at WMG – working together with UK suppliers and academic institutions.
“This is only a part of our overall vehicle development activities. In total we will spend more than £1 billion a year on product creation.”
Jaguar Land Rover directly employs more than 17,000 people in the UK and supports up to 130,000 jobs in total through the supply chain, dealer network and wider economy.
Dr Speth said the money invested would benefit the Treasury through export sales.
He said: “Some 75 per cent of Jaguar Land Rover production is exported, returning £8 billion last year in support of the UK balance of trade and export-led recovery.
“Jaguar Land Rover has two state-of-the-art engineering and design facilities in the UK. Our engineers are continuously pushing the boundaries of technological innovation to develop new generations of lighter more efficient vehicles and highly advanced powertrains and this will provide impetus for further growth, increased export revenue and even more new jobs.”
Lord Kumar Bhattacharyya, the founder of WMG, said: “Their cars are selling so well that they have to be continuously upgrading them.
“They have got fantastic engineers and it is up to the Government to realise that the automotive industry is crucial.”