
The transport secretary Phillip Hammond has confirmed that motorists will be given an incentive to encourage them to purchase low carbon cars.
People will receive up to £5,000 towards buying an ultra low carbon vehicle, under the scheme, which will reduce the cost of such cars by 25 percent.
Commenting on the scheme, which will be open to both business and private consumers, transport secretary Philip Hammond said: "The coalition government is absolutely committed to low carbon growth, tackling climate change and making our energy supply more secure.
"We are sending a clear signal that Britain is open for business and that we are committed to greening our economy. This will ensure that the UK is a world leader in low emission vehicles."
Energy and climate change secretary Chris Huhne added that electric and low carbon cars are essential to helping the UK meet its emissions targets and said he hoped the incentive would help "kick start" the market for such vehicles.
Last week, it was reported that Honda is hoping to have an electric car and plug-in hybrid vehicle on the market by 2012.