UPDATED: 6.32PM Electric cars will soon be allowed to drive in bus lanes, the Government has revealed.

The rule change is part of a long-awaited plan to increase the uptake of electric vehicles in New Zealand.

LISTEN ABOVE: Drive Electric spokesperson Mark Gilbert talks to Rachel Smalley

The package of policies for e-vehicles, or EVs, which was originally scheduled for release late last year, was unveiled by Prime Minister John Key and Transport Minister Simon Bridges in Auckland this afternoon.

It included a target of doubling the number of electric cars every year, which would amount to 64,000 cars by 2021.

The main incentive for purchasing an electric car would be exemptions on road user charges, which would save a car owner an average of $600 a year.

The exemption was already in place for light electric cars, but would now be extended to heavier vehicles.

Mr Bridges said the exemption's value to the typical vehicle owner is about $600 a year and several thousand over the vehicle's life.

Motorists in EVs would also be permitted to drive in bus lanes and high-occupancy vehicle lanes on state highways and local roads.

To satisfy demand, the Government would work with the private sector to investigate the bulk purchase of electric cars.

Public sector agencies would also co-ordinate to support the development of charging infrastructure across the country.

In the medium-term, the Government will review tax depreciation rates and fringe benefit taxes to ensure that electric cars are not being unfairly disadvantaged.

Announcing the policy at the Auckland War Memorial Museum, Mr Bridges said the benefits of a larger e-vehicle fleet were far-reaching.

“They’re cheaper to run than petrol or diesel vehicles, they’re powered by our abundant renewable electricity supply, and they’ll reduce the amount of emissions that come from the country’s vehicle fleet.”

Mr Bridges said the policies were designed to remove some of the barriers to increased uptake in New Zealand, which included a limited selection of electric cars, lack of infrastructure, and poor awareness.

He told Rachel Smalley right now manufacturers are focused on big markets, so there's not a range of electric cars available or a demand for them.

"What we're going to investigate very seriously is Government coming together with big companies, and little companies for that matter, and deciding on a strategy to try and do some bulk purchasing, to stimulate the demand in New Zealand."

A lobby group agrees that better infrastructure is needed to support more electric cars

Drive Electric spokesperson Mark Gilbert told Rachel Smalley there's anxiety that the infrastructure, particularly charging facilities, isn't up to scratch.

"There's a number of [private] groups, the power companies, lines companies, they're all doing their bit but yes, do we need more? For sure."

The Government has allocated $1 million to run an awareness campaign about the merits of switching from petrol or diesel to electric.

Mr Bridges said: “On average, charging an electric vehicle at home is equivalent to buying petrol at 30 cents a litre, compared to petrol which is around $2 a litre.”

The Government has previously said New Zealand is an ideal location for electric cars because of its relatively high proportion of renewable energy.

National’s electric vehicle policy is also a vital part of the Government’s bid to meet its climate change obligations.

John Key said 17 per cent of all our emissions are down to transport, and while steps have been taken to clean that up, more needs to be done.

"Nothing's going to be like the efficiency of an electric vehicle which obviously has zero emissions. So the first thing is it's great for the environment and helps address part of our challenge when it comes to climate change."

The transport sector produces 20 per cent of New Zealand's greenhouse gas emissions, and cutting this pollution is seen as more palatable and achievable to the Government than cutting agriculture emissions.