The National Reconstruction Fund announced its investment in Melbourne-based Applied Electric Vehicles on Wednesday, in a transaction that will make up more than half of the company's Series B funding.
It comes after the Clean Energy Finance Corporation invested $70 million in Volvo's plans to manufacture electric trucks in Queensland and start-up New Energy Transport announced plans to introduce a fleet of electric prime-movers in NSW.
The National Reconstruction Fund's $30.7 million investment will be its first in the transport sector - one of seven priority areas identified as in need of a manufacturing boost.
The investment will hasten the production of the company's Blanc Robots - which resemble vehicles that have been cut in half - made from a Suzuki chassis and proprietary components and software manufactured and installed in Australia.
The investment will help the company add another 25 employees to its staff of 113, National Reconstruction Fund chief executive David Gall said, and accelerate its path to production.
"It does speed up the building of Australia's industrial capability in this area," he told AAP.
"It's great to see in what was traditionally one of Australia's manufacturing heartlands - the south-eastern suburbs of Melbourne - new manufacturing starting to grab at the foothold."
Blanc Robot vehicles have been designed for use in industrial, commercial and logistics businesses, with companies adding customised cabins to their chassis, and could be used off-road in remote or hazardous locations.
In addition to self-driving capabilities, the vehicles' environmental credentials could help lower freight pollution and boost their export chances, Mr Gall said.
"The fact that these have been designed and built from the ground up with a view of having zero-emission operations will be key to their success," he said.
"The sort of businesses they'll be selling to are very focused on their emissions credentials and I think this will be a really important factor in the buying process in export markets, but certainly for Australian businesses."
The fund will join companies including Barrenjoey and Japan Post Capital in Applied Electric Vehicles' Series B round, which the company's chief executive Julian Broadbent said would help clear a path to larger production.
"When traditional automotive manufacturing left Australia, we saw an opportunity, tapping into the wealth of local engineering talent and building something truly innovative from the ground up," he said.
"This support not only accelerates our mission to scale the Blanc Robot and autonomous mobility solutions globally, but also validates the vision that brought us here."
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