New-energy vehicles are now officially on the Chinese government's list of "to-buy" vehicles, according to a new high-level directive.

The regulation, jointly issued lately by several government and Party organs, includes new-energy vehicles such as plug-in hybrids and all-electric vehicles for the first time on a list of officially approved government purchases.

The rule also aims to curb emissions by limiting the engine displacement of newly purchased government vehicles to 1.8 liters and restricts the price to 180,000 yuan (U.S. $28,000). Previous ceilings were 2.0 liters and 200,000 yuan, respectively.

While helping to limit emissions, the rule will also help reduce government expenses by prohibiting the purchase of luxury vehicles, said Ye Qing, a National People's Congress deputy. The current budget for official vehicles in China is more than 100 billion yuan (US $15 billion). The Tianjin Municipal Government has already embraced new-energy vehicles. It plans to expand its use of energy-efficient and new-energy vehicles to 1,500 vehicles by the end of 2012.

Experts say electric vehicles, which often get about 200 km per charge, are suitable for official use, since most government business involves traveling short distances within cities. Chen Jian, director of the International Technology & Economy Institute under the Development Research Center of the State Council, said including these vehicles on the approved list will help foster the market for new-energy vehicles.

Chen said the government is also encouraging new-energy vehicle use through several pilot programs.

Some of the programs will exempt new-energy vehicles from current purchase procedures involving license plate auctions or lotteries. Other programs will allow new-energy vehicles on the road seven days a week in contrast with six in many large cities. Other programs will offer preferential parking and toll fees as well as reduced electricity prices to new-energy vehicle owners.