London could be awash with electric cars by the middle of the next decade, as PSA Peugeot Citroen admitted it is targeting the capital in a big sales drive for its new iOn and C-Zero models — but only if the Government offers good enough subsidies for motorists to buy them.

The French motor giant said that it intends to put its first mainstream electric cars in London motor showrooms by this time next year.

The company's research and manufacturing chief, Guillaume Faury, told the Evening Standard that a three-year, €3 billion (£2.7 billion) ramp-up will see Peugeot Citroen aiming for 25,000 sales in Europe by 2015.

“We will be targeting big cities with congestion charges and emissions zones,” said Faury. “London is naturally an important place for us.”

The iOn and C-Zero hatchbacks which are being developed with Mitsubishi of Japan will have an 80-mile range on a single charge.

The most expensive part of the cars are their lithium-ion batteries costing around £10,000 each.

Peugeot Citroen is making it plain that its electric cars will not be commercially viable unless there are substantial government subsidies. In the UK, Government incentive schemes being talked about could provide up to £5000 to buy a new electric car.

“Incentive schemes will make or break this technology,” said Faury. “We are saying on price that in a pay-per-month finance package the cost of an electric car will be no more expensive than running a conventional car on finance.”