The decision comes after the grant, which would total 43 million pounds, escaped the ax of the public spending cuts adopted by the Conservatives and Liberal Democrats under the Comprehensive Spending Review.
"The coalition Government is absolutely committed to low carbon growth, tackling climate change and making our energy supply more secure," Transport Secretary Philip Hammond was quoted as saying by sunderlandecho.com.
"We are sending a clear signal that Britain is open for business and that we are committed to greening our economy. This will ensure that the UK is a world leader in low emission vehicles.”
"We will review the level of the incentive regularly to ensure that the UK remains competitive and taxpayers get value for money. The first review will be in January 2012, at which point we will set the level for subsequent years."
The biggest beneficiary of the bill and the one to which most of the money will go to is, of course, Nissan. Although the grant covers all low-carbon vehicles, the Leaf EV is expected to be the hottest seller under the program.
The Leaf will hence wear a price tag of 23,990 pounds, a value kept somewhat high because of the increase in the VAT value from 17.5 percent to 20 percent on January 1, 2011.
The conditions a vehicle will have to meet under the program will be announced shortly.