China ups the new energy car ante with unrestricted licence plates

According to a joint statement by the Ministry of Science and Technology, Ministry of Finance, Ministry of Industry and Information Technology and National Development and Reform Commission, new-energy cars will be exempt from the current license plate and traffic restrictions in some major cities.

Under a pilot scheme, 25 Chinese cities -- including Beijing, Shanghai, Dalian and Guangzhou -- have been urged to encourage the purchase and use of environmentally friendly vehicles.

As of the end of this year, the State Grid will build 75 charging stations and over 6,000 charging posts. The number of stations is supposed to surge to 400 by 2016 and 10,000 by 2020.

The programs are part of a renewed push China is taking with efforts to encourage the development of electric vehicles in the world's largest auto market, boosting shares of Chinese green car maker BYD Co Ltd, which is backed by US billionaire Warren Buffett, to its best daily gain in three years.

But whether China's green initiatives will boost sales of BYD's e6 electric car remains a big question, industry observers say.

"There is a big gap between stock market reaction or expectation and demand in the real world," said Yale Zhang, president of consultancy Automotive Foresight (Shanghai) Co Ltd.

"In the stock market, they can push up shares on perception, but you won't see a lot of electric cars on the road unless they are reliable, safe, convenient to use and not too expensive."

However, Daiwa Securities analyst Jeff Chung said strong demand for cars would be seen if potential buyers who did not receive a license to buy a car were able to purchase electric cars, said.

Beijing has declared the electric vehicle industry a top priority, earmarking USD1.5 billion a year for the next 10 years to transform the country into one of the leading producers of clean vehicles.