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LONDON (Reuters Life!) - British motorists will soon be offered up to 5,000 pounds ($7,460) to encourage them to buy electric or hybrid cars under a new government plan.
The plan also sets aside 20 million pounds for charging points and infrastructure to develop a network of what the government calls "electric car cities".
The incentives will be offered from 2011 when a new generation of electric cars is expected to become available.
Business Secretary Peter Mandelson and Transport Secretary Geoff Hoon announced the initiative in Scotland as part of a 250 million pound scheme to cut emissions and at the same time help the struggling motor industry.
"Cutting road transport CO2 emissions is a key element to tackling climate change," said Hoon. "Less than 0.1 percent 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."
Electric cars cost an average of 12,000 pounds, but go up to over 80,000 pounds for high-performance models.
Last week, London Mayor Boris Johnson announced a plan to introduce thousands of charging points across the capital.
A national demonstration project will give a small sample of some 200 motorists the opportunity to drive a cutting-edge car and give feedback to the industry.
"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," Mandelson said.
The two ministers were planning later on Thursday to drive a new Mini-E electric vehicle in Dunfermline in Scotland in a demonstration of the technology available.
Reporting by Stefano Ambrogi; Editing by Steve Addison