With the low-carbon economy booming worldwide, the trend towards cleaner, low-emission "green cars" has spread to China.

Both domestic and overseas companies are scrambling for leading positions in the hybrid and electric vehicles markets.

On April 23, Volkswagen launched its E-Lavida electric car at the 2010 Beijing International Automotive Exhibition. Honda and Volvo are also planning to launch clean-energy cars in China, joining a growing crowd of players developing "green" models to take advantage of generous government incentives.

"China is one of the most important auto markets in the company's global strategy," said Martin Winterkorn, chairman of the board of management of Volkswagen, at the world premiere of its E-Lavida on April 23. "Success in China has a significant meaning for Volkswagen in achieving its electric car strategy worldwide."

The National Development and Reform Commission included low-carbon targets in its 12th five-year plan (2011-2015) as part of a drive to build an energy-conscious, ecologically friendly society.

The government plans to raise the proportion of non-fossil and renewable energy, including wind, solar, biomass, geothermal and nuclear, in the energy mix to 15 percent by 2020.

For investors, it is a clear message that the government wants to cut China's dependence on oil.

The buzz around electric cars came as carmakers boosted their overall targets for China this year on turbocharged sales fueled by tax incentives from Beijing. Domestic car sales, defying the worldwide downturn, were up 76 percent in the first quarter of 2010.

Chinese companies are also battling for a share of the green car market. From China's leading auto maker SAIC Motor Corp to rising star Geely Automotive Holdings, domestic players are showing off a host of new green vehicles.

"There are big opportunities to grow the green car market in the next five to 10 years," said Li Shufu, President of Geely Automotive Holdings.

"I think China will become one of the most important markets for electric vehicles. If we use clean electric power like wind or solar, then electric vehicles will be clean. Not in three or five years, but maybe in 10 or 20 years, electric vehicles will be the majority in China," Li said.