The scheme will begin on January 2011 and will be open to both private and fleet buyers. It is expected to reduce the up front costs of ultra-low carbon cars by 25 per cent.
The incentive has been confirmed prior to the completion of the spending review in October in order to provide more certainty for investors and manufacturers of ultra-low carbon cars.
Speaking at a demonstration of ultra-low carbon vehicles at the SMMT in London, Business Minister Mark Prisk said:
“The consumer incentive will help Britain become one of the leading centres for the design, development and manufacture of ultra-low carbon vehicles. It sits alongside public and private sector investment in innovation and infrastructure, leading to the creation of new highly skilled low carbon jobs.”
Transport Secretary Philip Hammond said:
“We will review the level of the incentive regularly to ensure that the UK remains competitive and taxpayers get value for money. The first review will be in January 2012, at which point we will set the level for subsequent years.”
The criteria for eligible vehicles will be published shortly on the Office for Low Emission Vehicles (OLEV) website.
The Department for Business Innovation and Skills also announced six successful bidders who will share £660,000 in funding for recharging points under the Alternative Fuels Infrastructure Grant Programme.
The new projects will install infrastructure to support public and private sector fleets in trialling a wide range of natural gas, bio-gas and electric vehicles including buses, HGVs, and refuse collection vehicles.
Earlier this year it was announced that London, Milton Keynes and the North West would see a a roll-out of electric vehicle charging facilities to support the early electric vehicle market.
Dubbed Plugged-In Places, they will appear in car parks, leisure centres, supermarkets and local streets. Final funding of this initiative will be decided in the spending review.
High resolution images are available for download and re-use at the BIS Flickr page.