Its government is investing billions of dollars in the development of electric engines, and Chinese and international producers are in a hard-fought race to be the first to put an electric car suitable for daily use on sale in the world's largest car market.
The promotion of electric cars is a central point in China's new five-year plan, which begins next year, along with the consolidation of the country's car industry, aimed at making it competitive on the world stage.
The plan is ambitious: It aims to put 500,000 electric cars on the road by 2012, up from 2,100 today.
The government also announced a pilot programme this month for the cities of Shanghai, Shenzhen, Changchun, Hangzhou and Hefei in which customers purchasing electric cars would get 50,000 to 60,000 yuan (7,300 to 8,770 dollars) shaved off the price.
About 5 billion yuan have been set aside for the incentive programme and another 1 billion yuan is to go to research and development. Cities and provinces are also making more money available to promote their local producers.
"We want to profit from that," said Winfried Vahland, head of Volkswagen AG's China operations.
Europe's biggest carmaker plans to bring a marketable as well as "safe and affordable" electric car to the Chinese market by 2013 or 2014, he said.
Daimler AG also plans to introduce an electric car on the Chinese market by 2013 with its Chinese partner, the battery- and carmaker BYD Co. Daimler chief Dieter Zetsche said he sees "enormous potential for electric mobility in China."
China's car industry is charging ahead itself with some of its carmakers announcing plans to produce their own electric cars this year or next year.
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