A PROMISED grant of up to £5,000 towards the cost of an electric or ultra-low carbon car has survived Government cutbacks, it has been announced.
Transport Secretary Philip Hammond said the funding, first announced by the Labour government, will go ahead from January 2011.
The grant will reduce the cost of new ultra-low carbon vehicles by 25%, capped at £5,000.
The incentive has been agreed until the end of March 2012, with the level of grant being reviewed in January 2012.
The Department for Transport said the announcement of the incentive has been made before the completion of the autumn spending review to support the early market for ultra-low carbon cars.
Mr Hammond said: "The coalition Government is absolutely committed to low-carbon growth, tackling climate change and making our energy supply more secure.
"We are sending a clear signal that Britain is open for business and that we are committed to greening our economy. This will ensure that the UK is a world leader in low-emission vehicles."
The grant covers electric, plug-in hybrid or hydrogen fuel cell cars.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said: "This is great news for industry and a significant commitment by the new Government to create UK jobs in the emerging market for ultra-low carbon vehicles.
"The UK is well placed to exploit the global opportunities in the transition to low-carbon technologies and is already making significant progress through research and development, the low-carbon supply chain and vehicle manufacturing.
"The announcement is an important step in helping to attract new investment and laying the foundations for thousands of new high-skill jobs."
AA president Edmund King said: "This is excellent news and will be a fillip for manufacturers and consumers who are keen to see both further development of low or carbon-free emitting vehicles and for them to be more competitively priced in the market place.
"The recent successful car scrappage scheme showed just how effective a stimulus package like this can be."
He went on: "Car purchasers are urged to take all the factors into account when making a big long-term purchase like a car.
"They need to carefully check out their needs, the type of usage and long-term costs, as well as taking into account the very helpful incentive."
Greenpeace transport campaigner Vicky Wyatt said: "Electric cars are one of the ways we can cut our dependence on oil and move towards a clean, green transport system. That's why it's good news that the Government has announced this first chunk of funding.
"But if the Government is serious about putting hundreds of thousands more electric cars on Britain's roads, it's vital that Phillip Hammond makes a long-term commitment and stumps up the full £230 million, as promised by the previous government.
"This will boost the confidence of car makers who are looking to provide investment and jobs in UK, whilst at the same time helping the UK to cut carbon emissions."
Vauxhall Motors managing director Duncan Aldred said: "This announcement is good news for the UK.
"Stimulation of new low-carbon vehicle technology with incentives assures that the significant investment being made by both vehicle and infrastructure manufacturers will result in more buoyant sales and a fast track to the considerable impact low-carbon vehicles can make on our environment."
RAC motoring strategist Adrian Tink said: "We saw with the scrappage scheme that motorists like incentives and we know from our report on motoring that a third of drivers wanted the price of electric cars to fall before they'd consider buying one. So this is undoubtedly good news.
"That said, the motoring public will still need more information on the running costs and the range of these vehicles before they commit their hard-earned money to them."
He continued: "Low-carbon cars will play a vital role in the future of motoring and incentives such as this are a great first step.
"But we'd like to see the Government also consider making charging points a compulsory part of new building regulations and for them to take the lead by switching its very own fleet of vehicles to low-carbon alternatives wherever possible."
Friends of the Earth's transport campaigner Richard Dyer said: "It's disappointing that the Government has not committed to continue grants for greener cars until 2015 - longer term financial incentives are a great way to kick-start the market for low-carbon vehicles in Britain.
"But it will be many years before electric and hybrid cars make a meaningful contribution to slashing UK carbon emissions - we need to generate green electricity to do that, from renewable sources of energy.
"If the Government is serious about tackling climate change and boosting the economy, it should reverse green technology spending cuts and prioritise funding for cost-effective schemes that get people using public transport, cycling and walking more."
London mayor Boris Johnson said: "This is excellent news for London's plans to become the electric vehicle capital of Europe. We are already in the process of installing thousands of electric charge points across the city with the aim to have a network of 25,000 in place by 2015.
"Electric drivers are also exempt from the congestion charge and can save hundreds on fuel bills.
"London is ahead of the game so that as these vehicles come on to the mainstream market in the next few years, people will have the confidence to go electric, helping to improve air quality in the city. Today's incentives package from the Government is an extremely welcome boost."