The government's intention was to create a world-leading industry that would produce jobs and exports, and to reduce urban pollution and its oil dependence.However, a study found that even though local air pollution would be reduced by replacing a gasoline car with a similar-size electric car, it would reduce greenhouse gas emissions by only 19%, as China uses coal for 75% of its electricity production.The Chinese government uses the term new energy vehicles (NEVs) to designate plug-in electric vehicles, and only pure electric vehicles and plug-in hybrid electric vehicles are subject to purchase incentives.

The subsidies are paid directly to automakers rather than consumers, but the government expects that vehicle prices will be reduced accordingly.

The amount of the subsidy will be reduced once 50,000 units are sold.

In addition to the subsidy, the Chinese government is planning to introduce, beginning on January 1, 2012, an exemption from annual taxes for pure electric, fuel-cell, and plug-in hybrid vehicles.

Hybrid vehicles will be eligible for a 50% reduction only.

In 2011, only 8,159 electric cars were sold in China despite a 120,000 yuan subsidy.

Unsubsidized lead-acid EVs are produced without government approval at a rate of more than 30,000 per year in Shandong and requires no driving license because the top speed is less than 50 km/h.

They cost 31,600 yuan and have been the target of criticism from major car manufacturers.

Plug-in electric vehicles subject to incentives in some countries include battery electric vehicles, plug-in hybrids and electric vehicle conversions.

Shown here is a Toyota Prius Plug-in Hybrid recharging Government incentives for plug-in electric vehicles have been established by several national and local governments around the world as a financial incentive for consumers to purchase a plug-in electric vehicle.

The amount of these incentives usually depends on battery size and the vehicle all-electric range, and some countries extend the benefits to fuel cell vehicles, and electric vehicle conversions of hybrid electric vehicles and conventional internal combustion engine vehicles.

The Chinese government adopted a plan in 2009 with the goal of turning the country into one of the leaders of all-electric and hybrid vehicles by 2012.