The government is to cut grants aimed at encouraging people to buy electric vehicles in a move that has been criticised by the motor industry.

The Department for Transport will reduce the grant from £3,000 to £2,500 and restrict it to cars under £35,000. But Society of Motor Manufacturers and Traders (SMMT) said it is "the wrong move at the wrong time".

It said the decision goes against the government's zero emissions ambitions. SMMT chief executive Mike Hawes said: "This sends the wrong message to the consumer, especially private customers, and to an industry challenged to meet the government's ambition to be a world leader in the transition to zero emission mobility."

The government said that higher-priced vehicles are typically bought by drivers who can afford to switch to electric vehicles without a subsidy. It said the changes will allow funding for the grant to go further.

Transport minister Rachel Maclean said: "We want as many people as possible to be able to make the switch to electric vehicles."

"The increasing choice of new vehicles, growing demand from customers, and rapidly rising number of charge-points means that while the level of funding remains as high as ever, given soaring demand, we are re-focusing our vehicle grants on the more affordable zero emission vehicles."

The government will also alter how it calculates the plug-in van grant, and change the eligibility for grant to vehicles that are able to travel for 60 miles without any emissions. The plug-in car grant was introduced a decade ago, and was designed to reduce the price of electric cars, which generally cost more to make than petrol or diesel equivalents, to encourage more people to buy them.