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U.K. To Invest $850 Million By 2020 To Promote Electric Vehicles

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2014 BMW i3 in London

2014 BMW i3 in London

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Despite hefty incentives, electric vehicle sales have remained stagnant in the United Kingdom.

While sales doubled in 2013 compared to 2012, matching the global trend, just 2,500 vehicles found homes last year. That's less than the Nissan Leaf sells in some single months in the U.S.

The UK government has this week promised to invest £500 million--almost $850 million--to boost the 'ultra low emission vehicle' industry.

According to Charged EVs, the government sees it as a way to aid growth in the UK auto industry's $19 billion contribution to the economy.

Money will go towards both electric vehicle adoption incentives, and investing in the country's strong research and development industry--assisting the UK in becoming a world leader in green vehicle technology.

Cities will be able to put forward their own ultra-low emission city plans, hoping to win a share of £35 million ($59 million) to better-equip cities for electric travel--giving EV drivers access to bus lanes, or setting aside free parking.

A further £32 million (£54 million) will go towards charging infrastructure, with ambitious plans for quick-chargers at every motorway service center, 500 countrywide by 2015.

A whole £50 million ($85 million) will be set aside for investing in cleaner taxis and buses--hugely important, given recent diesel-related pollution concerns.

The UK's plug-in car grant will be extended too. While the grant will remain the same, at around $8,500 per vehicle, it'll continue for a further two years--giving more drivers the chance to buy cheaper electric vehicles.

MORE: New Range-Extended Electric London Cab A 'Masterpiece', Says Mayor After Test Drive

UK plug-in car drivers already benefit from zero-rate vehicle taxes, exemption from London's congestion charge zone (saving commuters thousands of dollars per year) and low company vehicle tax rates--as well as other corporate perks.

Despite existing incentives, electric cars make up just a fraction of the UK's new car market--around 0.2 percent. In Norway, that figure is six percent, and 5.6 percent in the Netherlands.

It isn't clear why UK drivers have shied away from electric vehicles so far--though high prices, a proliferation of inexpensive gasoline and diesel rivals and skepticism over their usability could all be a factor.

Choice could be a factor too, with only a handful of affordable models on sale.

While the government's new $850 million investment is likely to spur growth in individual locations, it could take much longer for electric cars to really shine on UK roads.

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