"Making all-electric cars also bypasses China’s shortfall in internal-combustion engine technology and oil resources," he said.
Chen made the comments at the World Electric Vehicle Symposium and Exposition (EVS) in Shenzhen, a major fair for the world’s electric car industry.
"Due to its deteriorating environment, China has made electric vehicles a priority in developing the electric vehicle industry," Chen said.
The term "electric cars" includes all-electric cars, those employing fuel cells, and hybrids. The all-electric variety, exclusively lithium ion batteries powered are the most environmentally friendly.
Chen added that the country’s highly developed lithium ion batteries technology will also help domestically produced all-electric cars gain an advantage in the international market. The Chinese government has been fostering domestic sales by offering financial support in recent years.
In June, China granted subsidies of up to 60,000 yuan ($9,000) to buyers of electric vehicles in the five cities chosen for the pilot program – Shanghai, Changchun, Shenzhen, Hangzhou and Hefei. Buyers of plug-in hybrid cars are eligible for incentives worth up to 50,000 yuan.
Jia Bingcheng, chairman of Zhongwen Yixing Electric Car, said the company gets 500,000 yuan from the central government, and 300,000 yuan from local authorities, for every all-electric passenger car it produces.
The Shandong-based company has an annual production capacity of 500 cars, which sell for 1.3 million yuan.
"The subsidies make our cars more affordable than diesel models, giving us a competitive edge over traditional vehicles," Jia said.
The subsidies were established before the new-energy car industry was written into the draft of the 12th Five-Year Plan (2011-2015), China’s economic development roadmap, as one of seven strategic emerging industries set to receive further government support.
According to a report by the Shanghai Securities News, China may invest more than 100 billion yuan in the electric vehicle industry during the next 10 years.