PlayMotorists who buy electric cars could pocket a cash incentive of up to £5,000 as part of a Government scheme.
Transport Secretary Geoff Hoon said the initiative - part of the Government's low-carbon transport plan - would mean an electric car was "a real option for motorists".
In the plan, consumer incentives would be introduced in 2011 to coincide with the expected mass introduction of electric and plug-in hybrid (part electric, part petrol) cars to the market.
The plan is for consumers to receive help from the Government worth between £2,000 to £5,000 to allow for the maximum choice of which car they buy.
The Department for Transport is beginning discussions with the motor industry and financiers to determine how best to deliver this assistance.
To be eligible, cars would need to meet modern safety standards and have a range and top speed sufficient to give mass market appeal.
Mr 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."
Lord Mandelson said: "Britain has taken a world lead in setting ambitious targets for carbon reduction. Low-carbon vehicles will play a key role in cutting emissions."
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