Riversimple, a UK firm with backing from Ernst Piech, a member of the Porsche dynasty, will provide 30 hydrogen fuel-cell powered cars for a trial in Leicester from spring 2012.
The 12-month project is designed to trial the cars and help identify suitable refuelling points in the city. Riversimple says that if the project is a success it will locate a manufacturing plant with a capacity for building 5000 cars in Leicester.
The Riversimple is a two-seat car with a top speed of 50mph and a range of 200 miles. It is built using lightweight composites and weighs just 350kg. The car is currently designed at built at Silverstone in Northamptonshire.
When the car goes into production Riversimple plans to lease it out for a monthly and all inclusive per mile charge, similar to a mobile phone contract. It estimates the average user will pay £200 a month plus 15p per mile to run the car.
Riversimple also plans to run a second trial in another city, and is currently trying to raise £20m of investment to further its plans.