Government supports climate change with electric car investment

Earlier this month, Business Secretary Vince Cable warned that the UK’s car industry will not receive any further funding from the Government but said it would consider investing in measures which would reduce emissions from cars and to help transform the UK into a low carbon economy.

As a result, the Government has today unveiled it will support this area and drivers who purchase a new generation electric car from January 1, 2011, will receive 25% off – up to a maximum £5,000.

Spending cuts introduced by the Government to reduce the budget deficit meant investment in the car industry was in doubt, but the £43 million earmarked for the industry will be protected.

Transport Secretary, Philip Hammond, comments: “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. We will review the level of the incentive regularly to ensure that the UK remains competitive and taxpayers get value for money,” he added.

The subsidy will come into force at the same time as the UK launch of the Nissan Leaf (an acronym for Leading, Environmentally Friendly, Affordable, Family Car).

The Leaf is the first major competitor to the Toyota Prius. Once charged, the Leaf runs for about 70 miles, costing just 3p a mile.

Meanwhile, the grant will come into effect on the same day as the hike in VAT – from 17.5% to 20%, which will add nearly £640 to the cost of a £30,000 car.

The grant will be available to both private and business fleet buyers across the UK and the scheme will run until 31 March 2012 – or until funding runs out.

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