The Society of Motor Manufacturers and Traders (SMMT) has hailed the confirmation of a plug-in car grant scheme as "great news" for the industry.
Welcoming transport secretary Philip Hammond's announcement of the initiative at the SMMT offices, the society's chief executive Paul Everitt said the move will help to safeguard the UK's position as a low-carbon industry leader.
The scheme, which was originally announced by the previous government last year, will entitle buyers of certain electric, hybrid or hydrogen cars to claim grants of up to £5,000.
In addition, the coalition administration will also be offering more Plugged-In Places funding to cities and regions that wish to upgrade their low-carbon vehicle infrastructures.
Mr Everitt said: "Today's announcement is an important step in helping to attract new investment and laying the foundations for thousands of new high-skill jobs."
The SMMT was previously vocal in its praise of the last government's scrappage scheme, which it credited with stimulating demand for new vehicles in what would otherwise have been a difficult trading climate.
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