The new business, GKN EVO eDrive Systems, allows British-owned multinational drivetrain manufacturer GKN to add EVO Electric’s advanced axial flux electric motor and generator technology to its eDrive System portfolio.

In turn, it will allow them to build cheaper, more powerful and more efficient units than conventional radial flux technology.

GKN has also acquired 25.1% of EVO electric, providing financing for technological developments and commercial resources to grow the venture further. The investment is closing at £5m consideration in cash.

It also allows GKN to compete for a share of the rapidly growing market for hybrid and electric vehicle drive systems, estimated to be worth £17.8bn by 2020 in a recent study by management consultancy firm McKinsey & Co.

Nigel Stein, CEO of GKN Driveline said: ‘This strategic addition will enhance GKN Driveline’s ability to meet its customers’ needs in drivetrain electrification. It is aligned with our strategy of supporting vehicle manufacturers as they search for fuel savings and reduced CO2 emissions through hybrid and electric drive vehicles.’