The government is set to announce that it will ban the sale of all new diesel and petrol cars by 2040.
This is also likely to affect hybrid vehicles that run with an electric motor and a small petrol or diesel engine. France also announced a similar plan earlier this month.
The ban is a move to cut emissions as much as possible. The government has also announced it will unveil a plan to inject more than £255 million into local councils to help tackle their emission issues created by diesel-powered vehicles, which makes up part of the £3 billion spend on improving air quality.
FairFuelUK said: "Banning new diesel and petrol car sales by 2040 will cost trillions to consumer and the economy. It is inevitable that carbon based fuels will be phased out to favour cleaner fuels, but to do it as a cliff edge in 20 years is naive and ill thought."
Environment Secretary Michael Gove has proposed a scheme that would see £255 million given to local authorities to help draw up plans to tackle emissions on the most polluted roads.
Speaking to Radio 4's Today programme, he said: "What we're saying to local authorities is come up with an imaginative solution to these proposals.
"I don't believe that it is necessary to bring in charging, but we will work with local authorities in order to determine what the best approach is."
It has also been announced that the plan will include a scrappage scheme, although details on this will be released after ministers have consulted on the matter.
However, chief executive of SMMT Michael Hawes believes that although people are purchasing more alternatively fuelled cars, the UK is not ready for a ban. He said: "Currently demand for alternatively fuelled vehicles is growing but still at a very low level.
"The industry instead wants a positive approach which gives consumers incentives to purchase these cars. We could undermine the UK's successful automotive sector if we don't allow enough time for the industry to adjust."
Many car companies have already announced plans for electric cars, such as BMW who announced earlier this week that its all-new electric-powered Mini will be produced at its plant in Oxfordshire from 2019.
In a move towards alternative fuel, Volvo has made a statement that all its models will all have an electric motor working alongside a petrol or diesel engine from 2020 onwards. It also plans to have sold more than a million electric cars by 2025.