INTRODUCTION

1.1 The transition from vehicles which use liquid fossil fuels to those using alternative fuels including electricity provides the UK with the opportunity over the long term to substantially decarbonise road transport and improve local air quality. Developing and manufacturing Ultra Low Carbon Vehicles (ULCV) will also create opportunities for the UK automotive sector to benefit from the transition to lower carbon vehicles.

1.2 In April the Department for Transport and the Department for Business, Innovation and Skills, published the Ultra-Low Carbon Vehicles in the UK vision document. This document outlined the comprehensive package of Government measures, worth nearly £400 million, to accelerate the transition to ULCV for motorists and the UK automotive sector. In delivering this, the Government aims to help position the UK as one of the global leaders of ULCV development, demonstration, manufacture and use.

1.3 For example, Government is supporting the trial of almost 500 electric and lower carbon cars and vans through the Technology Strategy Board’s Low Carbon Vehicle Innovation Platform and the DfT’s Low Carbon Vehicle Public Procurement Programme

1.4 One of the key measures in the Government's programme is to support an early consumer market for electric and plug-in hybrid cars, and in January we announced that DfT will provide £250 million for this. In Ultra-Low Carbon Vehicles in the UK we gave more details - in particular that the bulk of the money (around £230m) will be used to deliver point of purchase price reductions worth in the region of £2,000 - £5,000. This consumer incentive scheme is scheduled to start in 2011 when we expect a range of vehicles to be on sale.

1.5 In addition, we are providing £20 million to help deliver the charging points that these vehicles will need through the “Plugged in Places” Electrical Vehicle Infrastructure Framework. As announced in the Low Carbon Industrial Strategy, this is being further supplemented by up to £10 million from the low carbon element of the Strategic Investment Fund

1.6 This document sets out our current thinking and proposals for how the consumer incentive and the Plugged In Places schemes could work and the conditions we propose to attach to each element of the scheme. The proposals that we are presenting are not necessarily the final ones; we want to discuss these proposals with industry, regional and local government and other stakeholders in coming months and finalise plans later in the year. This work will be delivered by the new Office for Low Emission Vehicles once it is operational later this year. OLEV will bring together in a single programme cross Whitehall interests to deliver the policy package outlined in Ultra-Low Carbon Vehicles in the UK.

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