The Deputy Prime Minster said the scheme would look to get drivers into ultra low emission vehicles by extending the grants for ultra-low emission vehicles, targeting increased charging points and investing in technology.

In total, £500 million will be invested between 2015 and 2020, of which at least £200m will be used to extend the current Plug-in Car Grants of up to £5,000 off the upfront costs, in order to encourage more people to use ULEVs.

£32m will be used to boost the country’s charging infrastructure including plans to install rapid chargepoints across the motorway and A-road network by 2020. This includes a rapid chargepoint at every motorway service station by the end of 2014, and a network of 500 rapid chargers across the country by March 2015.

Meanwhile local authorities will be able to bid for a share of an extra £35m for innovative charging plans, with the example cited of incentivising drivers of green cars by letting them use bus lanes or allowing them to park for free. Additional funding of £50m will also be available for local areas to invest in cleaner taxis and buses.

And the Government will invest £100m in research and development in ULEV to ‘cement the UK’s position as a leader in the development of these technologies’.

Nick Clegg said: ‘This major investment is there to make driving an electric car affordable, convenient, and free from anxiety about the battery running out. But it’s also about creating a culture change in our towns and cities so that driving a greener vehicle is a no-brainer for most drivers.

The latest announcement follows Nick Clegg’s launch of the Go Ultra Low campaign in January. Backed by five major car companies, Go Ultra Low provides clear answers about the vehicles and how to use and charge them.

The new scheme has been greeted carmakers including BMW. UK managing director, Tim Abbott said: ‘The UK Government’s commitment to supporting the transition to lower-emission vehicles comes at a crucial phase in the development of the electric car market.

‘The Government’s funding commitment provides certainty that the UK is serious about embracing these new technologies and complements the very substantial investments being made by industry to introduce innovative lower-emission technologies that are not only exciting for customers but also good for the environment,’ Mr Abbott.

‘The development of rapid charging infrastructure, together with the continuation of the Plug in Car Grant, is particularly important in giving potential electric vehicle owners the additional confidence some of them might need to make the switch,’ he added.

Full details of each scheme will be published by autumn 2014, with some of the schemes opening for applications shortly thereafter.