Mike Stevens | Apr 17, 2009

To give a leg-up to the green car industry, the UK government is proposing financial incentives for buyers of new electric and plug-in hybrid vehicles.

The move by the UK government is similar to the tax benefits offered to buyers of small-capacity 'kei' cars - with engine capacities no larger than 660cc - in Japan.

Under the scheme, if it gets through the Commons, drivers purchasing a CO2-beating car would be eligible for a grant of between £2,000 and £5,000 (AUD $4,145 and $10,365). The scheme, proposed to run for five years, also includes funding to establish an ‘electric car cities’ infrastructure.


Some £20 million (AUD $41.5 million) has been earmarked for setting up electric car charging points throughout cities in the UK. Funding will also be used to expand an electric and ultra-low carbon car demonstration project currently in place.

Transport Secretary Geoff Hoon (yes really, Hoon) spoke about the intent of the plan:

"Cutting road transport CO2 emissions is a key element to tackling climate change. Less than 0.1% 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," he said.

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