Green car grants confirmed

A promised grant of up to £5,000 towards the cost of an electric or ultra-low carbon car has survived UK government cutbacks.

Transport Secretary Philip Hammond said the funding, first announced by the previous government, will go ahead from January 2011. The grant will reduce the cost of new ultra-low carbon vehicles by 25 per cent, 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. 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.

"Today's announcement is an important step in helping to attract new investment and laying the foundations for thousands of new high-skill jobs."

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