From January 1st, motorists buying the first three of the named electric cars will get 25% off, up to a maximum of £5,000, in the form of a Government grant.
The first three cars are the Mitsubishi iMiEV, the Mercedes-Benz smart fortwo ED and the Peugeot iON.
The 25% reduction, known as the 'Plug-In Car Grant', will also apply to the other six cars as they become part of the scheme over the next few months.
They are: the Citroen CZero, available in early 2011, the Nissan Leaf and the Tata Vista EV.
Available from early 2012 will be the Toyota Prius Plug-in, the Vauxhall Ampera
and the Chevrolet Volt.
The Transport Secretary Philip Hammond said "A few years ago, ultra-low emission cars with mass-market appeal are a reality and we can have all the convenience of the car without the carbon that normally goes with it."
The Government has also confirmed that five new regions had been successful in applying for a share of a £20 million fund to install local charging points for the vehicles.
The east of England charging points include Stansted airport, Cambridge, Norwich and Ipswich.
The Midlands points include Birmingham, Coventry, Nottingham and Worcester, while Scottish points include Edinburgh and central Glasgow.
Greater Manchester and Northern Ireland also benefit.
Critics are quick to point out the limitations of electric cars in terms of their use - not to mention the cost.
For example, the Vauxhall Ampera will cost £28,995 even with the £5,000 grant.
The RAC Foundation told Sky News: "Clearly we are still a long way from an affordable mass market for these vehicles, but this is a very welcome step in the right direction."
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