Favorable policies that support the development of new energy vehicles are expected to come out this year, yesterday’s China Business News quoted an insider from the China Association of Automobile Manufacturers as saying.

The regulator has completed soliciting public opinion on the drat policies, which include preferential taxes on new-energy vehicles, according to the insider.

The Olympics last month opened the way for the biggest showcase of alternative fuel vehicles in China, but there’s a lot more coming, according to the Minister of Science and Technology.

A "green fleet" of 500 vehicles running on a range of alternative fuels have been used since the start of the Olympics. In July, Wan Gang, Minister of Science and Technology, said it was not just an exhibit but the start of an industry.

Wan said in an interview with the China Business News that his ministry is planning to promote "one thousand alternative-fuel vehicles in 10 cities". In four or five years, he said the mass production of alternative-fuel vehicles will become a reality, making up 10 percent of annual output each year.

An officer from the Ministry of Industry and Information Technology said China is inefficient in energy use and energy wasting is quite pervasive. Vehicle oil consumption per 100 kilometers in China is 20 percent higher than that of Japan, and 25 percent more than that of Europe.

But policies on alternative-fuel vehicles, aiming to save energy and reduce pollution, are being designed by the Ministry of Industry and Information Technology, the National Development and Reform Commission and the Ministry of Science and Technology, Ou Xinqian, Vice Minister of Industry and Information Technology, announced this at the 1st China Green Energy Automotive Development Summit 2008. Though not specified, the policies are expected to be carried out within the year.

The State Council issued papers to promote the development of alternative-fuel vehicle in February 2006, and listed "energy-saving and alternative-fuel vehicles" and "hydrogen and fuel-battery technology" in the priority topics and frontier technology respectively in the Essentials of National Medium and Long-Term Science and Technology Plan (2006-2020).

The "rules on the manufacture of alternative vehicles" published last November also lit the hope for domestic players to develop in accord with standard game rules.

Domestic automakers are enthused about the research and development in alternative-fuel vehicles. BYD Auto, Chery, Brilliance Auto, Changan Auto, SAIC, Dongfeng Motor and FAW have all made plans on the development of alternative-fuel vehicles.

SAIC presented its hybrid model last year, and BYD introduced its iron cell electric car earlier this year. Chery subsequently debuted the first carbinol fuel car two months ago.

Statistics show there are currently 76 models of sedans and passenger vehicles powered by hybrid, pure electric and fuel cells, manufactured by 27 companies.

But now, new energy vehicles are still rare to see on the street as their higher prices and lagging consumption incentive policies. The Toyota Prius and Honda’s Civic Hybrid, the two most popular hybrid vehicle models in the Chinese market, are suffering flat sales.

(China Daily September 3, 2008)