Subsidies to jump start UK green car revolution

The first green cars to qualify for a subsidy of up to £5,000 were unveiled by the Government yesterday.

Under £400m plans to boost take-up of expensive electric and ultra-low carbon vehicles, buyers will be able to claim up to a quarter of the price of nine models of car: the Mitsubishi i-MiEV, the Smart fortwo electric drive, the Peugeot iON, the Citroën CZero, the Nissan Leaf, the Tata Vista EV, the Toyota Prius Plug-in, the Vauxhall Ampera and the Chevrolet Volt.

The scheme starts in the new year, but only the Mitsubishi, the Smart and the Peugeot will be immediately available. The launches of the other models are spread over the rest of 2011 and into 2012. And more low-carbon vehicles are expected to join the scheme over its four-year life.

At a launch event in London yesterday, Philip Hammond, the Secretary of State for Transport, also announced infrastructure grants for the Midlands, Greater Manchester, East of England, Scotland and Northern Ireland. The money will pay for charging infrastructure to support electric cars. London, Milton Keynes and the North East – which have already won similar grants – will also receive more money from a central fund worth a total of £20m.

"Government action to supportaffordable vehicles and more local charging points means we are on the threshold of a green revolution," Mr Hammond said. "2011 could be remembered as the year the electric car took off."

However, industry experts said that the subsidy – which translates as around 15,000 cars per year – is unlikely to have a major impact on Britain's car fleet.

But it will send a signal about British industry. The UK has already won the competition to build the European version of the Nissan Leaf at the Japanese giant's Sunderland factory. And there are high hopes that Europe's Vauxhall/ Opel Ampera will be built at the US group's Ellesmere Port plant. Any overt government commitment to green cars will boost the chances of success, according to Hilton Holloway, the associate editor of Autocar magazine.

"These subsidies have more of an eye on Britain's manufacturing than on its car drivers," Mr Holloway said. "The ides is to show that we are open to low-carbon business."