The Department for Transport says that widespread adoption of electric vehicles capable of a range of 50km (31 miles) or more would cut road transport carbon emissions in half.
Hoon said, "What we've got to get people used to is the idea that electric cars will become quite normal, quite usual.
"It won't be exceptional to own an electric vehicle and, without being unkind to existing electric vehicles, they won't be slightly odd; they will be cars that conform to appropriate safety standards and we can use on an everyday basis."
Hoon said that the financial incentive would help to speed up the process of persuading car buyers into electric vehicles.
"I accept that, for most consumers, what drives their decision to buy a new car is generally the reduction in the cost of fuel rather than their concern about carbon emissions," he said.
"But there are significant numbers of people, and those numbers are growing every day, who are concerned about the impact of carbon on the environment. It's the responsibility of the government to help those people achieve our overall targets.
Richard Parry-Jones, chairman of the industry-led New Automotive Innovation and Growth Team (NAIGT) said, "The auto sector in the UK has transformed itself into a world-class industry, with superb design and engineering skills, very high productivity, product reliability that rivals the best in the world, and flexible, constructive labour relations.
"Today's announcement represents a major step towards achieving the NAIGT’s ambition of ensuring that the industry in the UK can play a decisive global role in developing and manufacturing exciting, low-carbon vehicles for the future."
"Electric vehicles will be part of that, provided that we also ensure that the electricity we generate is generated increasingly from renewable sources."
Hoon added that he was keen to work with Boris Johnson, the mayor of London, who recently announced his intent to make the city the electric car capital of Europe by introducing 100,000 electric cars and building 25,000 charge points in the streets and car parks.
Mr Hoon said, "Clearly I want to work with him and see what's possible in London and am willing to help financially if there are sensible schemes that can be brought forward. London is a showcase for the UK and large numbers of electric vehicles around the UK would be a good thing."
Gordon Brown last week stated that he wants Britain to be a world leader on green technology, and said that he would consider buying electric cars for government ministers as a means of setting an example.