Adam checks out an electric car
Most cars run on petrol and produce a gas called carbon dioxide which experts say is bad for the environment.
But the government wants to encourage people to drive electric cars which produce no pollution when driven.
Electric cars have batteries that are loaded with electricity from the mains. But they can run out of power quite quickly and take a long time to charge.
Car companies are working on newer, better models though that could be out to buy in the next few years.
The government says it will help people buy electric cars by handing them up to £5,000 to spend on one from the year 2011.
An electric car at a city charging point
They are also going to build charge points in city centres across the country so the cars can get power from them.
Car makers are having a tough time at the moment because of all the money problems the world is having. The government reckons that helping pay for electric cars will give them a boost.
Not everyone is happy
Green experts aren't completely happy though, they say that even though electric cars are cleaner than existing petrol ones most of the electricity they need comes from big power stations that produce pollution too.
They say the best way to help the environment is to ditch our cars altogether.