The grants to lower the cost of EVs will be funded through a £650m scheme, and will be available for three years. There are around 1.3 million electric cars on Britain's roads but currently only around 82,000 public charging points. At the weekend, Transport Secretary Heidi Alexander said the government would invest £63m to fund EV charging points.

The discounts will apply to eligible vehicles costing up to £37,000, with the most environmentally friendly vehicles seeing the biggest reductions, the Department for Transport (DfT) said. Carmakers can apply for funding from Wednesday, with the RAC saying discounted cars should start appearing at dealerships "within weeks".