The government has announced the names of the first batch of low-carbon cars that will be eligible for a ‘Plug-In Car Grant’ of up to £5000.
Available from 1 January 2011, the discount will apply to any qualifying car with a Co2 rating of less than 75g/km.
The first nine cars to become eligible for the grant are the Mitsubishi iMiEV, Smart fortwo ED, Peugeot iON, Citroen CZero, Nissan Leaf, Tata Vista EV, Toyota Prius Plug-in, Vauxhall Ampera and Chevrolet Volt.
The grant has been configured to reduce the retail cost by 25 per cent up to a maximum of £5000. However, with VAT at 20 percent from the 1 January, the discount on the Nissan Leaf and Vauxhall Ampera roughly equates to the Government simply making the vehicles VAT-free.
The ‘effectiveness’ of the grant will be reviewed by the government over the next four years, with the first formal review in 2012.
Transport secretary Philip Hammond said: "Government action to support affordable vehicles and more local charging points means we are on the threshold of an exciting green revolution - 2011 could be remembered as the year the electric car took off.'
The government says more models will be added to the list from next year. However, the ‘Plug-In Grant’ is currently subject to a limit of £300m over the life of the current parliament – which equates to around 15,000 registrations per year between next January and 2015.
The remaining £100m from the Government fund designed to ‘promote the uptake of ‘ultra-low carbon vehicle technologies’ will be split between £20m for the installation of re-charging infrastructure and £80m ‘to support research and development activities’.