Under the "Plug-In Car Grant", fleets and private motorists buying qualifying electric cars will be able to get 25% or up to £5,000 from next January.

BVRLA chief executive John Lewis commented: 'Business fleets already buy more than half of all cars registered each year so it makes sense that they will be able to take advantage of this incentive.

'A discount of up to £5,000 is attractive, but buyers are not stupid. Fleets will need some assurance that the electric vehicle they are buying will have a second-hand value in three, six or even ten years' time.'

The fact that qualifying vehicles will need to comply with a number of criteria that cover battery warranty amongst other areas has also been welcomed.

'The three-year battery warranty outlined in the DfT's qualification criteria is a bare minimum requirement so we are pleased that buyers will have to be given the option of paying for an extended five-year warranty,' said Mr Lewis.

The DfT has outlined the safety criteria required to qualify for the incentive, which says that vehicles need either EC whole vehicle type approval or to have met the EuroNCAP protocol or a similar crash test regime.

'Most car manufacturers have used the EuroNCAP safety standard as a marketing tool. Fleet buyers take their duty of care responsibilities very seriously and will expect the same levels of safety from any electric or plug-in hybrid vehicles,' responded Mr Lewis.

The BVRLA also says that the vital role that the vehicle rental industry can play in helping to reduce carbon emissions has also been recognised, with news that a group of rental companies will share in Transport for London's winning bid for a Plugged-in-Places grant.

'It is great to see the car rental industry playing such an important role in the development of London's electric vehicle charging infrastructure,' added Mr Lewis.