The Chancellor's support for autonomous and electric vehicles announced in the Budget has been welcomed by many in the automotive industry.

Mr Hammond has said he wants to see driverless cars on UK roads by 2021, and has announced financial support and regulatory changes designed to speed up the development and testing of autonomous technology. This includes removing legal barriers to on-road testing.

'Autonomous and electric vehicles will form the backbone of future mobility in the UK and, if integrated successfully, will prevent thousands of road casualties and significantly reduce air pollution and congestion,' said Richard Cuerden, chief scientist at TRL.

'The measures announced today will help bring this vision a significant step closer and position the UK alongside other leading nations who are at the forefront of the electric and autonomous vehicle revolution'

He added that with support from the Government, including funding for test bed projects announced in October, TRL is confident that we will see fully-driverless cars tested on UK roads in 2019, with commercial vehicles available in 2021.

'The first vehicles may be limited to certain roads and environments, such as motorways or pre-determined routes within cities, but the rate of progress could surprise many in the industry,' he said.

The new budget announcements have also been welcomed by the Driven Consortium, which is working on a project to develop and operate a fleet of fully-autonomous vehicles to operate on public roads within the next two and half years.

Oxbotica CEO and Driven consortium leader Graeme Smith said the measures served to underline the Government's commitment to driverless vehicles and that the current level of development of this technology would not be possible without Government funding.

'Government support here has the potential to be repaid many times over as well, in terms of new, high-skilled jobs, enormous export potential and improved productivity.

'By announcing these new measures and getting behind the drive towards autonomy, the UK government is showing it is not afraid of what the future holds, and that it wants to see Britain leading us into it'

The budget also contained support for electric vehicles with Mr Hammond announcing a £400 million fund for electric vehicle charging infrastructure, a £100 million Plug-In-Car grant and £40 million for charging R&D.

This coincides with higher taxes for diesel cars from April 2018 that will apply to any cars that don't meet Euro 6. Mr Hammond said that this levy will fund a new £220 million Clean Air Fund to provide support the implementation of local air quality plans.

The combination of measures shows that the Government is serious about encouraging consumers to buy more environmentally friendly vehicles but does not address the issue of batteries.

'While EV grants go some way to making it easier to sell electric vehicles, the elephant in the room is the cost of batteries,' said Justin Benson, head of automotive at KPMG.

'This remains the largest single cost of new EVs. It would, therefore, be good to see more help for low emission technologies, such as enhancing R&D tax credits for battery and hydrogen delivery technology.

'Although this change may encourage some consumers to purchase new lower emission cars, it will mean further downward pressure on new and used diesel car prices, thereby reducing future investment in an industry already suffering from significantly reduced levels of investment due to uncertainty over Brexit'