Government has announced it will spend £250m to promote ultra-low carbon vehicles.

Transport secretary Geoff Hoon said the money would be made available to develop consumer incentives to help motorists go green, and to develop the infrastructure necessary to refuel ultra low-carbon vehicles.

Lawrence Holland, general manager of electric vehicle manufacturer Aixam Mega, said that while niche manufacturers are heavily investing in such development, as are larger carmakers, it is “only governments that can develop the tax regimes and national infrastructures necessary to effect real change in the way that people drive”.

He added: “We hope that this new money will be invested well and quickly, so that we can start to see a real improvement in transport emissions and in air quality, and progress being made in developing the low-carbon economy.”