Motorists will be encouraged to buy electric vehicles with a Â£5000 carrot, the Government announced on Thursday.
It has set aside an incentive pot of Â£230 million â€“ the Plug-In Car Grant Ââ€“ which will entitle motorists to a 25% discount up to the value of Â£5000 from the list price of electric, plug-in hybrid or hydrogen fuel cell car.
The incentives will be available to consumers at the point of sale from January 2011.
The Government also announced plans to roll out a Â£30 million fund for a network of electric vehicle charging hubs called Plugged-In Places.
The first Plugged-In Places will be London, Milton Keynes and the North East where 11,000 vehicle recharging points in car parks, at major supermarkets and retail centres will be installed during the next three years.
Welcoming the scheme, Paul Everitt, chief executive of the SMMT, said: â€œManufacturers develop and produce new technology where demand exists. This incentive will encourage international investment in the UK as well as helping motorists cut CO2 emissions.â€