Ministers also unveiled a £255million fund to help councils tackle vehicle emissions.
However, the £3billion clean air strategy does not include a scrappage scheme, which was considered poor value for money.
Ministers have been wary not to punish diesel car drivers, not least since previous governments had encouraged diesel uptake.
The SMMT are also against an outright ban on diesels, which it considers would hurt the sector.
Chief executive, Mike Hawes, said demand for alternatively fuelled vehicles was growing but still at a very low level.
He said, “The industry wants a positive approach, which gives consumers incentives to purchase these cars. We could undermine the UK’s successful automotive sector if we don’t allow enough time for the industry to adjust.”
The UK announcement comes amid signs of an accelerating shift towards electric cars over petrol and diesel cars.
However, as the AA points out, significant investment will be needed to install charging points, upgrade and increase the capacity of the National Grid, before widespread uptake will become viable.
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