The vehicle developed by Drayson Racing Technologies eclipsed the old 175 mph record, set in 1974, in a run at a Royal Air Force base in Yorkshire, the BBC reported Tuesday.
Company head Paul Drayson, who was driving, said the achievement was designed to highlight the potential of electric vehicles.
He founded Drayson Racing in 2007 while he was a minister in the Labor government.
The team set the record using a Lola B12 Le Mans series car into which it installed a lightweight motor/battery system providing 850 horsepower.
"What it, I hope, shows to people is just what the future potential of electric cars is," Drayson told the BBC shortly after his record-breaking speed was officially confirmed.
His company works to develop more sustainable automotive technologies, he said, and uses motorsport competitions as a means to focus its efforts.