Business Secretary Peter Mandelson and Transport Secretary Geoff Hoon launched the Government's vision to promote ultra low carbon transport over the next five years.

Central to the strategy is an initiative to help put electric cars into the reach of ordinary motorists by providing help worth £2000 - £5000 towards buying the first electric and plug in hybrid cars when they hit the showrooms - which we expect from 2011 onwards.

The Government has recently committed to placing low carbon transport at the centre of its vision for the UK economy. Today's announcement will promote infrastructure and support technology development and encourage manufacture in the UK, whilst incentivising consumers.

This funding is included in a £250 million scheme to deliver a green motoring transformation, part of the wider Government support to help consumers and businesses make the transition to low carbon.

Transport Secretary Geoff Hoon said;

"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."

The strategy also includes plans to provide £20 million for charging points and related infrastructure to help develop a network of 'electric car cities' throughout the UK and an expansion of an electric and ultra-low carbon car demonstration project on the UK's roads. This project will mean over 200 motorists throughout the country will have the opportunity to drive a cutting-edge car and feedback the information needed to make greener motoring an everyday reality.

Business Secretary Peter 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. Government must act now to ensure that the business benefits of this ambition are realised here in the UK. We want the British motor industry to be a leader in the low carbon future, and Government must direct and support this, through what I call new industrial activism."

The Government has already committed around £400 million of support to encourage development and uptake of ultra-low emission vehicles. This is in addition to a £2.3bn package of support for the automotive sector in the downturn that has been specifically designed to support the development of green technologies to provide solutions for carbon reduction and a world leading low carbon automotive industry.

Speaking today, Richard Parry-Jones, Chairman of the industry led New Automotive Innovation and Growth Team (NAIGT) welcomed the announcement:

"The auto sector in the UK has transformed itself into a world-class industry, with superb design and engineering skills, very high productivity, product reliability that rivals the best in the world, and flexible, constructive labour relations. Today's announcement represents a major step towards achieving the NAIGT's ambition of ensuring that the industry in the UK can play a decisive global role in developing and manufacturing exciting, low carbon vehicles for the future."