The incentive could knock as much as 5,000 pounds ($9,000) off the sticker price of electric vehicles when it is introduced in 2011, the government said. UK prices for the cars range from about 8,000 pounds to 80,000 pounds.
The government claimed investments would make Britain a world leader in low carbon transport. But industry analysts and green activists said the environmental benefits would be negligible while the cars are charged using electricity from Britain's predominantly gas or coal-fired power stations.
The government said it will also spend 250 million pounds ($375 million) on support the technology needed for cleaner transport, of which about a tenth would be spent building electric charging points and other infrastructure.
"The scale of incentives we're announcing today will mean that an electric car is a real option for motorists as well as helping to make the UK a world leader in low carbon transport,'' Transport Secretary Geoff Hoon said in a statement.
Tim Urquhart, an automotive analyst with IHS Global Insight, said the headline-grabbing strategy appeared ill-thought out and was not part of wider sustainable transport policy.
He said the subsidies were unlikely to spark a sales boom since the public has shown little interest in the small cars.
Only 156 electric cars were sold in the UK from January to October 2008, according to the Clean Green Cars, a Web-based environmental auto guide, down nearly 60 per cent compared to the same period in 2007. The site said that, as of last month, there were just 120 charging stations in use in the UK, about a third of them in London.
Green activists also expressed reservations.
"Financial support from the government for electric cars is a welcome step in the right direction.... However, electric cars are only as green as the electricity they run on," Friends of the Earth said in a statement.
The RAC Foundation, which lobbies on behalf of British motorists, said it was still unclear how the money would be spent.
"If the whole 250 million pounds were divided up so 5,000 pounds (are) allocated per person this would only put an extra 50,000 electric cars on the road out of an annual total of some 2.7 million cars sold in the UK," director Stephen Glaister said.