Green Car Sbsidy Tials Sart in Five Pilot Areas

BEIJING, Jun. 3 -- BYD Vice-President Wang Jianjun agreed that the subsidy program would have a limited influence while there are also many other factors affecting the car market. For example, it will take time for consumers to get familiar with green vehicles and businesses will need time to develop related services such as roadside recharging stations, Wale said.

Therefore, BYD's production goal for its green cars is only 1,000 units in 2010 and it has no plans to shift to mass production this year, Wang said.

One remaining problem to affect the spread of green cars is that, even with the subsidy, most green cars will be selling for 200,000 yuan per unit (more than $29,000), and are still more expensive than the gas-powered models, according to Zhao Hang, director of China Automotive Technology Research Center.

Previously, the central government announced it would invest up to 10 billion yuan in the development of new energy vehicles, so that by 2015, there will be between 500,000 to 1 million green cars on Chinese roads.

Auto industry consultant Jia said that, although China is keen on new energy vehicles, especially electric cars, it doesn't mean it's the time for mass sales.

"The fact that new energy vehicles are still in the trial stage is the major reason why the subsidy program is only carried out in five cities," said Zhao, director of China Automotive Technology Research Center.

"To compete with conventional vehicles in the market, companies must speed up technical development and the government needs to increase subsidies," Zhao said.