No money from the £2.3bn Automotive Assistance Programme launched last January has yet been spent.
It was set up by the Government to provide funding for UK vehicle manufacturers to invest in future technologies, but has yet to help a single company.
The Business, Innovation and Skills Select Committee described the AAP as a "wasted opportunity".
But the Department for Business Innovation and Skills said it was working with 10 firms to fund projects worth about £2bn through the scheme.
"It is important to understand that the AAP is about long-term investment projects, rather than short-term rescue," said a spokesman.
Its critics have said it is too inflexible. The funding is only available for new research projects, not existing programmes already developing new technology.
Peter Luff, chairman of the Business, Innovation and Skills Select Committee, said: "When it was announced, AAP represented a genuine opportunity to help the automotive industry.
"But it is now December and not a single loan or loan guarantee has been made.
"It is up to the government to prove us wrong, but they must ensure that funds are released to companies very quickly."