Mitsubishi Motors (UK) has confirmed the on-sale price of the i-MiEV electric car at £38,699.

From the start of January 2011, the Government's incentive scheme will bring the price down by £5,000, making the transaction price £33,699 including VAT.

According to Mitsubishi, the electric car costs £115 in electricity to cover 12,000 miles of driving (£0.96 pence for a full charge).

It also says it has low servicing costs and downtime – only approximately four working parts compared to over 300 in a typical internal combustion engine.

All electric cars are exempt from road tax and for companies that put them on their fleets, they enjoy first year capital allowances benefits.

Company drivers who use electric cars and vans also pay no benefit-in-kind company car tax.

Finally, all EVs are exempt from the London congestion charge and get free parking in many London boroughs and cities such as Milton Keynes.

Lance Bradley, Mitsubishi Motors UK’s managing director, said: “These are exciting times for the motor industry in the UK.

"This is the biggest change in the automotive industry since it began some 100 years ago, so to be able to offer our zero-emissions car for this price is a truly great achievement.

"We are aware that, by their very nature, any new technologies always command a premium, which has been true for anything from plasma televisions to cars.

"Others make price claims and estimations, but we have a real vehicle that is available now and is proven in the real world.”