Buyers of electric cars in Britain will get subsidies of up to £5,000 ($7,450) under plans unveiled yesterday by the UK government to boost low-carbon transport.
The car industry welcomed the incentives but urged the government to do more to help it through the economic crisis.
Buyers of new electric or plug-in hybrid vehicles that are expected to hit the market in 2011 will be given subsidies of between £2,000 and £5,000. They are designed to help early adopters defray the cost of a new range of electric cars that will be priced at a premium during the launch phase as carmakers and battery producers build scale.
Geoff Hoon, transport secretary, said the incentives would help to make electric cars a "real option".
There are only a few thousand electric cars on the road butBMW, Daimler, Renault/Nissan, PSA Peugeot Citroën, Toyota and General Motors plan to launch plug-in models during the next three years.
The programme, part of £250m of funding towards electric cars announced in January, also includes £20m to build charging points and pilot projects to allow 200 drivers to test them.
The availability of a recharging points, and cost, are seen as the main hurdles to the cars gaining ground with consumers.
The measures, if introduced, will make Britain the latest European country to provide incentives for low-carbon cars. Denmark and Portugal have policies in place.
Gordon Brown said last summer he wanted all cars on Britain's roads to be electric or hybrid by 2020.
The government wants international carmakers to produce the vehicles in the UK. GM has raised the possibility of bringing production of its planned plug-in Opel/Vauxhall Ampera model to its plant in Ellesmere Port. Nissan's UK plant is vying to build an electric car for a mass-market launch in 2012 by the Japanese company and its French partner Renault.
The Society of Motor Manufacturers and Traders welcomed the announcement, but said the focus must be on "guaranteeing the UK industry's long-term future".
Richard Lambert, director-general of the CBI employers' organisation, described the announcement as a "welcome step", but said: "The automotive industry needs urgent support now."
Passenger car registrations in Britain fell 30.5 per cent last month, compared with an 8 per cent drop recorded across western Europe, according to data published by Acea, the European carmakers' association.
The government remained silent on a separate plan being pushed by industry lobbyists to pay consumers £2,000 to scrap old cars and buy new models. The proposal, put forward by the business department, is the subject of Treasury concerns about its cost. An announcement is expected next week in the Budget.
