The Government will continue to support the development and sale of ultra-low emission vehicles (ULEVs) the Chancellor George Osborne said in his Autumn Budget Statement.

He announced continued support for uptake and manufacturing of ULEVs, with £600m capital available for investment during 2015-20.

The Government aims for all new cars to be ULEVs by 2040, and to help maintain “the lead in manufacturing that has seen the UK build a quarter of all the ULEVs sold in Europe”.

More detail on future rates for the Plug-in Car Grant are expected to be announced shortly by the Department for Transport.

To reflect the recently agreed timetable for introducing new EU-wide emissions testing rules, the Autumn Statement 2015 also announced that the three percentage point diesel supplement in Company Car Tax is being retained until 2021, when all new diesel cars will meet expected air quality standards as far as possible under real world driving conditions. The Treasury says that retaining higher rates for diesel cars should support transition in the UK from diesel cars to cleaner zero and ultra-low emissions cars.

Responding to the Autumn Statement, LowCVP managing director Andy Eastlake said: “We welcome the clear signal that the Government plans to continue its support for the low carbon automotive sector and clearly sees its importance to the UK economy as well as to environmental progress and consumer pockets.

“The Government’s trajectory for ULEV uptake – and those of the Committee on Climate Change in its fifth carbon budget advice, for 60% ULEVs by 2030 – are ambitious, and we will need to protect the developing market and accelerate the pace in order to meet them.”