Just how far down the road is Jaguar Land Rover toward producing the new generation fuel-efficient, eco-friendly cars it needs to secure its long-term ­future? Quite a long way, is the answer.

The company employs hundreds of specialist staff at its engineering centres at Whitley, Coventry, and Gaydon, ­Warwickshire, and is working on projects worth an estimated £800 million. These will benefit from the £340 million package agreed by the European Investment Bank yesterday – which could transform the firm’s fortunes.

Building cars from recycled aluminium and plastic are just part of the thinking. New transmission systems and pollution-cutting engines are also under development.

A luxury saloon capable of more than 57mpg? Jaguar probably has it in the shape of Limo Green, a three-year project costing £500 million.

The car will look similar to the new flagship XJ saloon that Jaguar is due to unveil later this year but under the bonnet things will be very different.

It will be powered by a “series hybrid” electric engine which has an on-board generator to keep the batteries charged.

The 170 bhp electric motor means that Limo Green will have a performance comparable to that of the diesel-engined XF and an average fuel consumption figure of 57mpg, as good if not better than today’s family cars. Jaguar’s engineers say the car will have a carbon dioxide output figure of less than 120g/km and could even fall below the 100g/km limit that qualifies a vehicle for zero road tax.

As an indication of the industry-wide collaboration that is laying the groundwork for tomorrow’s cars. Jaguar’s partners in the Limo Green project include the Motor Industry Research Association, the engineering division of sports car-maker Lotus and Caparo, a specialist in aluminium construction.

Separately, JLR has on the stocks a project called Rehev, short for Range Extended Electric Vehicle, aimed a developing an electric-diesel hybrid powertrain suitable for a big 4x4 such as Range Rover.

Rehev is an extension of the hybrid engine that Land Rover already plans for its new Range Rover-badged LRX concept car that is due to go into production at JLR’s Halewood assembly plant on Merseyside. Jaguar is also fitting a fluid flywheel system developed for Formula One to its XF which recovers energy wasted during braking.

Then there’s REAL – Recycled Aluminium, which is key to the company’s drive to ramp up the volume of recycled materials from half to three quarters in three years.

Mark White, chief technical specialist for lightweight vehicle structures, said: “Aluminium is more expensive than steel but we get better fuel economy and lower emissions. If you make it lighter you can push it along easier.”