Chinas annual output of electric vehicles with lithium-ion batteries is expected to reach one million units by 2020, according to a report from state news agency Xinhua over the weekend.
The ministry of science and technology will shortly issue a new policy framework for 2011-2015 to help boost production, and the government aims to spend 100bn yuan ($15bn) over the next ten years to support the fledgling industry.
Minister of science and technology Wan Gang told Xinhua on Saturday that an estimated 8.5 bn yuan ($1.3bn) had already entered the electric car industry from the capital markets, but more was needed.
"As the worlds largest auto market, new energy vehicles are key to the development of Chinas auto industry," he said.
China already has a pilot program set up to promote electric vehicles in 25 cities including Shanghai, Changchun, Shenzhen, Hangzhou and Hefei, with the government now providing subsidies of up to 60,000 yuan ($9,000) for the purchase of zero emission vehicles.
In addition local and municipal authorities such as Hangzhou are offering further subsidies for electric vehicles, as well as using local state funds to help develop a network of charging stations.
Wan said automobile exhaust emissions accounted for 70 per cent of air pollution in Chinas big cities, adding that public transport should also be the top priority for the use of electric vehicle technology.
China is now the worlds largest auto market, with 13.6 million vehicles sold last year, and the market continued to grow rapidly in the first half of 2010 with sales up almost 48 per cent year on year to 9.02 million units.
Earlier this month Nobuo Tanaka, executive director of the International Energy Agency, welcomed Chinas progress in the sector, but added that the nation needed to also move to decarbonise the grid electricity supply that will power its expanding fleet of electric cars.
"Chinas problem is to how to supply electricity carbon-free, as China now heavily relies on coal, therefore the power structure or power generation structure is probably a big issue for China," Tanaka said.
source: APEC-VC Korea
