The zero-emission Smart Fortwo electric drive is set to enter production, after initial reactions from trials proved positive.
A number of bodies tested the car with a view to using it in green fleets, including the Metropolitan Police and various universities.
These trials proved so successful that parent company Daimler AG decided to go ahead with small series production, meaning UK drivers should be able to buy the cars from early next year.
Dermot Kelly, managing director of Mercedes Benz UK, commented: "The smart electric drive is exempt from vehicle excise duty and the London congestion charge and this, underlined with incredibly low operating costs, means that companies taking part in the trial are finding it makes perfect fiscal sense."
The car uses a lithium-ion battery which allows the electric drive to have a larger range, shorter charging time and improved performance compared with previous models.
Mayor of London Boris Johnson also welcomed the development, saying that manufacturers like Smart provide "an easy choice" for people who want to switch from polluting vehicles.
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