Ministers embrace electric car revolution

A transport gear change could see vehicles given away free, with revenue made from selling motorists contracts to supply power

Gordon Brown is to launch the biggest revolution in the way Britons drive since the development of the internal combustion engine. He will meet manufacturers this week to try to persuade them to mass-produce electric cars, and is considering a remarkable plan to sell the cars cheap, together with their fuel, that is modelled on mobile-phone contracts.

The scheme, which has already been taken up by Israel and Denmark, would sell heavily subsidised vehicles – or even give them away – in return for contracts to buy the electricity to charge them. Its inventor, a Silicon Valley software entrepreneur, believes it will at least halve the cost of motoring while dramatically reducing one of the main sources of the pollution that causes global warming.

The Prime Minister – who will reveal some of his thinking at the Motor Show this week – wants all new cars sold in Britain to be electric or hybrid vehicles by 2020, and is trying to enlist leaders of the motor industry because he wants "to see those cars manufactured in Britain".

He also wants to "incentivise" the rapid changeover to electric vehicles in Britain, and so is studying the mould-breaking scheme being promoted by the 38-year-old entrepreneur, Shai Agassi, backed by $200m (£100m) of venture capital. Under the scheme – the most advanced of several proposals the Government is considering – motorists would be provided with cars just as mobile-phone customers now get their handsets. In return, they would take out a contract for a maximum number of miles.

The contract would entitle them to receive the electricity, either by plugging into any one of hundreds of thousands of recharge points across the country, or by exchanging flat batteries for fully charged ones. At present, the cars' range is likely to be only about 100 miles between recharges, which would take about two hours, so, on longer journeys, motorists would pop into filling stations for a three-minute battery exchange.

However, the plan will only help to fight climate change if the electricity comes not from fossil fuels, but from nuclear or renewable energy.