First zero-emission 4x4s to be manufactured in North East

The first vehicle to be produced at the site in Cramlington will be a plug-in electric Range Rover with a 200 mile range, a top speed of 100 mpg, and a price tag of around £125,000, depending on the model and specification.

Liberty Electric Cars launched last year with aim of delivering large, luxury electric cars that people will aspire to drive. It claims its ‘state of the art’ energy storage and management system will deliver superior performance compared to existing technologies.

Production volume for the electric Range Rover is likely to top 1,000 per annum and is expected to be followed by other Land Rover models and prestige marques.

Liberty has signed a memorandum of undertaking to invest £30 million in the production of electric vehicles at Cramlington and the deal is estimated to be worth £120 million a year to the local economy.

Chief executive Barry Shrier, commented: "North East England is fast becoming a world leader in clean energy, infrastructure development and electric vehicle manufacturing, which is why we feel that our business will prosper here."

Although the market is currently small, manufacturers like Liberty are anticipating exponential growth in demand for electric cars – which have 80 per cent lower running costs than petrol vehicles – as legislation, social awareness and technological advances accelerate changes in transport choices.

Last week, London mayor Boris Johnson announced to the London Assembly that he was considering introducing an electric car hire scheme in London. He said: "I think we should be making London the electric capital of Europe, and that's why we are going to be greatly expanding our support for charging points around London.”

Manufacturers of electric cars may also be beneficiaries of the Department for Business, Enterprise and Regulatory Reform’s £2.3 billion Automotive Assistance Programme which received European Commission (EC) approval this week and which is intended to fund investments from the UK automotive sector that are "consistent with the Government's objectives for the low carbon economy".

Welcoming the EC's approval, business minister Ian Pearson said: "We are committed to helping the car industry bridge to the low carbon future."