The government is to offer people between £2,000 and £5,000 to help buy an electric car. The funding is part of the government’s strategy to reduce the UK's CO2 emissions.
Road vehicles account for 19% of the UK's domestic CO2 emissions
From 2011, anyone buying an electric or plug in hybrid car will be able to receive help worth between £2,000 and £5,000, depending on the cost of the vehicle they are looking to buy.
To be eligible for the hand-out cars would need to meet modern safety standards and have a large enough range and top speed to make them popular.
Transport Secretary Geoff Hoon said: "Cutting road transport CO2 emissions is a key element to tackling climate change. Less than 0.1 per cent of the UK's 26 million cars are electric, so there is a huge untapped potential to reduce emissions.
"The scale of incentives we're announcing today will mean that an electric car is a real option for motorists as well as helping to make the UK a world leader in low carbon transport."
The government has also provided £20 million to pay for more charging points and related infrastructure to help develop a network of 'electric car cities' throughout the UK.