Thursday, the UK government announced financial support for motorists to encourage the purchase of electric and plug in hybrid cars that will reduce carbon emission.

In a joint statement, the Department for Transport and the Department for Business Enterprise & Regulatory reform said government will provide help worth GBP 2000 to GBP 5000 to ordinary motorists towards the purchase of the first electric and plug in hybrid cars. These hybrids are expected to hit the showrooms in 2011.

The funding is part of a GBP 250 million scheme to deliver a green motoring transformation, part of government's wider support to help consumers and businesses switch to low carbon.

The measure announced by the government today would support infrastructure and technology development and encourage manufacture in the nation.

Transport Secretary, Geoff Hoon said there is a huge untapped potential to reduce emissions as only less than 0.1% of the 26 million cars are electric in the UK. He said the incentives formulated by the government would make an electric car a real option for motorists and helps to make the nation a world leader in low carbon transport.

The strategy also consists of plans to provide charging points and other related infrastructure costing GBP 20 million to develop a network of 'electric car cities' throughout the nation.

Business Secretary Peter Mandelson said the government has already committed around GBP 400 million of support to encourage development and uptake of ultra-low emission vehicles. This is in addition to a GBP 2.3 billion package of support for the automotive sector in the downturn.

At the same time, Chief Executive of the Society of Motor Manufacturers and Traders, Paul Everitt said the measures show the commitment of the government towards developing a market for ultra-low carbon vehicles. He added the motor industry is in the middle of its greatest economic challenge and immediate action to preserve the UK sector in the short-term is essential if we are to stake our claim in the global development of low carbon technology for the future.

According to a BBC report on April 13, the British government would possibly launch a scheme for car owners to replace their existing ones with new ones in order to create demand in the automobile industry. The report said the scheme will consist of a payment of GBP 2000 to trade in cars that are a certain number of years old. The government is expected to unveil the scheme in the budget statement on April 22.

Last week, the German government more than tripled its car-scrapping bonus scheme to EUR 5 billion from an initial EUR 1.5 billion. The scheme is expected to benefit nearly two million people, an increase from the initial estimate of about 600,000. The scheme was to end on May 31, but now it is extended till the end of the year.

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