The £5000 Plug-in Car Grant scheme has been extended until at least February 2016, the government has announced.
The scheme, last renewed in 2014, offers motorists £5000 off the price of plug-in cars that emit 75g/km of CO2 or less.
At the time of its last renewal, it was announced that the deal would be reviewed when 50,000 vehicles were sold through the scheme, a figure that is expected to be met in November this year after a 256% growth in ultra-low emission vehicle registrations in the first six months of 2015, compared with the same period in 2014.
Andrew Jones MP, Transport Minister, said: “The UK is now the fastest growing market for electric vehicles in Europe.
“We will continue to invest to help make this technology affordable to everyone and to secure the UK’s position as a global leader.”
Reacting to the news, Society of Motor Manufacturers chief executive Mike Hawes said: “With British buyers taking to ultra-low emission vehicles faster than anyone else in Europe, the extension of the Plug-in Car Grant is good news.
“The market for these vehicles remains small, however, so it is essential that the government continues to provide effective incentives for their uptake - including the Plug-in Car Grant and other measures.”
The Mitsubishi Outlander PHEV is the UK's best-selling plug-in hybrid, and the manufacturer welcomed news of the renewal.
“We have seen ultra-low emission vehicles rapidly establish a 1% share of UK sales in a period of time unprecedented in automotive terms,” said Lance Bradley, managing director of Mitsubishi Motors.