James Dyson, the billionaire inventor of the bagless vacuum cleaner and bladeless fan, is building an electric car that will launch by 2020, the latest firm to challenge traditional carmakers in a burgeoning market.

Tesla has already shaken up the sector around the world and Dyson said it would now spend $3.4 billion on solid-state battery technology and vehicle design.

The announcement could stoke debate in Australia over the subsidisation and slow adoption of electric cars. Australian drivers lag behind developed markets in their transition to green vehicles.

On a rare visit to Australia in June, Renault Nissan Alliance chairman Carlos Ghson told Fairfax Media that electric cars will not be a success in Australia until governments are willing to subsidise their use.