The vast majority of Government grants for ultra-low emission vehicles have been awarded to fleets as they lead the way in emissions reduction.

Latest figures provided by the Office for Low-Emission Vehicles on its Plug-In Car Grant have revealed that of around 800 cars which have received a grant so far this year, 75% have been for business use.

The grant has been available since January and provides up to £5,000 to offset the additional costs of acquiring an electric vehicle.

However, the relatively low take-up has prompted the British Vehicle Rental and Leasing Association to warn electric vehicle manufacturers that they need to cut prices if they want to energise the market as more electric vehicle models arrive in the UK over the next year.

John Lewis, chief executive of the BVRLA, said: “More than a dozen new electric and hybrid vehicles are set to hit the UK market over the next year, but most of them will be decorating showrooms unless manufacturers are more realistic on pricing.

“Ultra-low carbon transport is a necessity and electric vehicles have a big part to play in getting us there, but these vehicles are simply too expensive for most fleets at the moment.

“With existing concerns over range anxiety and residual values, potential customers will need to see some real cost benefits if they are to adopt this exciting new technology in significant numbers. Fleet customers don’t buy on sentiment – cost is their main criteria.”

However, Government officials have suggested that take-up is being limited by vehicle availability as manufacturers ramp up model production.

They also point out they are also pushing forward with an extensive public recharging network.

Under the Government’s Plugged-In Places programme there will be 4,000 public recharging points for electric vehicles, with a further 2,500 expected to be installed in workplace and a further 2,000 in people's homes, backed by a £30 million fund to support installation and trialling of recharging infrastructure.