Electric cars will be exempt from road user charges for four years under legislation passed by Parliament last night.

The change is intended to encourage people to use them.

The exemption applies to light electric vehicles -- those weighing up to 3.5 tonnes -- which are classed as diesels for the purpose of road user charges.

That meant they paid 3.6 cents to 4c per kilometre.

"The Government sees private vehicles continuing to be the most significant mode of transportation for most New Zealanders," Transport Minister Steven Joyce said when he introduced the bill.

"Therefore it is important that we encourage the use of alternative fuel technologies in order to help meet our environmental obligations over time."

Mr Joyce said combining highly efficient electric motors with New Zealand's competitive advantage in renewable electricity generation would reduce the greenhouse gases produced by the transport sector.

The exemption will be effective from October 1 this year and continue until 2013 when the Government will reassess it.

Mr Joyce said there were very few electric vehicles currently in the fleet and the loss in revenue would not be significant.

The bill passed its third reading on a unanimous vote.

Labour supported it although MPs said it was a timid attempt to encourage the use of electric cars.