The Federal Government has unveiled the first all-electric car that has been certified to run on Australian roads.

The plug-in car made by Mitsubushi, called the iMiEV, can travel 160 kilometres on a seven-hour charge and has a top speed of 130 kilometres per hour.

The car runs on a bank of lithium ion batteries. The engine uses no petrol and does not produce any greenhouse gas emissions.

The Transport Minister, Anthony Albanese took the car for a test drive in Melbourne today. He says the car should start rolling off production lines soon.

"I understand that it's Mitsubishi's intention to be producing this vehicle on a large scale from June of this year," he said.

"And I think for many Australians, this will have great appeal. It's particularly appropriate for use around city driving."

Mr Albanese says the car has met Australia's stringent design rules.

"We have 83 hoops that cars have to get over, because we want to ensure that the safety of motorists, passengers, and indeed pedestrians is paramount," he said.

"With this vehicle, it satisfies all of those requirements."

It is not clear whether the model will be sold in Australia and the company is not saying how much the car will cost.

Project engineer Ashley Saunders says the car is in the feasibility testing stage and the company is trying to gauge consumer interest.

"Technology's expensive but it always is when you're introducing new technology," he said.

"We expect over time the price of the technology will come down as you get economies of scale in production phase."

Mr Albanese says it is unlikely the government would provide incentives for the project.

"This is a commercial operation by Mitsubishi and certainly in terms of its position at the moment, the government doesn't have plans to go along that route," he said.

The first 2,000 are expected to roll off the assembly line towards the end of the year.