Motorists to receive government grants for electric cars

• £2,000 pledge for eco-cars in green economy drive • Brown aims at making industry a world leader
Nicholas Watt, Chief political correspondent
The Guardian, Thursday 9 April 2009

A £2,000 government grant will be provided to encourage motorists to buy electric cars as part of a fresh initiative to stimulate the green economy, ministers will announce within weeks.
As Gordon Brown pledged yesterday to make Britain a "world leader" in the production of electric and hybrid cars, government sources talked of steps to be taken when the special subsidy is announced in the run-up to the budget on 22 April.
The subsidy will have two aims: to help the environment, by encouraging use of the most fuel efficient cars, and to kickstart the market in electric cars in Britain.
One government source said: "We want to encourage people to buy these cars. They are good for the environment - Britain is also a major centre of production."
The subsidy will be similar to grants available for people who install solar thermal and photovoltaic energy equipment in their homes.
Ministers are also considering a "scrappage scheme", whereby motorists receive a £2,000 subsidy towards the costs of a fuel-efficient car in exchange for turning in their old vehicle. An announcement is not expected soon on this scheme because ministers believe it could end up subsidising overseas car producers, since most new vehicles in Britain are imported.
Brown believes it is right to give a subsidy to electric cars because Britain is a large producer of them. Vauxhall is due next year to introduce the Ampera, the British version of the General Motors Chevy Volt plug-in hybrid.
Geoff Hoon, the transport secretary, told the Guardian in January that the government needed to do more to encourage electric cars, which can be seen as unglamorous, or, at the higher end of the market, as overpriced. He recently test-drove an electric sports car, designed by the inventor of Paypal, that accelerates as fast as a Ferrari and runs for 500 miles without being charged. But that vehicle costs £100,000, the battery accounting for £60,000 of the price tag.
Hoon admitted the cars were expensive but said people should be encouraged to buy them. "Electric cars are not milk floats, they can be exciting sports cars, they can be family runabouts, they can replace the petrol-driven engine."
On Tuesday the European Investment Bank approved a £340m loan to Jaguar Land Rover to develop "green" vehicles. A further £373m will go to Nissan, to be split between its plants in Sunderland and Spain, to develop green technology.
Meanwhile, Boris Johnson, the London mayor, yesterday announced plans to ensure that 100,000 electric cars were used in London, covering 5% of the total. This is the same target highlighted by Hoon in his Guardian interview; he said that a 5% switch to electric cars would offset the extra emissions from a new third runway at Heathrow.
The goals, said Johnson, would be to create 25,000 electric charging spaces in London by 2015, convert at least 1,000 Greater London Authority fleet vehicles to electric by 2015, and ensure charging points are installed in all new developments in London. "This is an unprecedented package of measures to make London the electric car capital of Europe. It is time for the government to put its money where its mouth is," he said.