Taking a walk along the streets of Hefei, capital city of central China's Anhui Province, the chances are you will see a steady stream of new energy vehicles made by Jianghuai Automobile Co. Ltd. (JAC).

"As the petrol price continues to rise, new energy vehicles are now better options compared with similar level petrol powered cars for consumers in cities like Hefei," said Mei Hanbing, an owner of a JAC new energy car in Hefei.

He said that driving a new energy car would save him as much as 9,000 to 10,000 yuan ($1,431 to $1,590) on an average mileage of 20,000 km.

Although the Hefei-based JAC was not a pioneer in new energy car development, it has been instrumental in spearheading efforts at commercializing the vehicles. JAC put a focus on new energy vehicle research as early as in 2002 and set commercializing pure electric cars as its priority in 2009. By December 2010, the Chinese homegrown automaker had produced 585 first-generation J3 electric vehicles (EVs) for private ownership, claiming to be the first automaker to make electric vehicles on a large scale. A year later, 1,000 second-generation J3 EVs were made and sold, and in the first nine months of this year, JAC produced 500 third-generation J3 EVs.

Thanks to JAC's achievement in commercializing electric vehicles, Hefei has rolled out a demo project promoting new energy vehicles for private use in 10 cities across China.

New energy trend

At the 2012 International Forum on Chinese Automotive Industry Development held August 31-September 2 in Tianjin, Wan Gang, Minister of Science and Technology, said that while the auto industry had become one of the country's pillar industries, China was facing chronic air pollution, increasing carbon emissions and traffic jams. "As the contradiction between huge auto demands and severe energy shortage and stricter emission controls became critical, it is imperative to boost the development of the new energy auto sector," Wan said.

According to a report on the new energy auto industry released this March by Zheshang Securities, a Hangzhou-based market analysis institution, the number of registered cars in China soared from 11.8 million to 19 million during the 11th Five-Year Plan period (2006-10). However, only 54 out of 1,000 people own cars in China, much lower than the world average, suggesting a huge market potential and a massive pressure on fuel supplies. 

The report said the vehicle-related consumption of fuels would hit 25 million tons by 2020, while China's fuel consumption heavily depends on imports. About 56 percent of crude oil used in China was imported in 2011, and by 2030, the figure will reach 70 percent.

Additional pressure on the auto industry comes from stricter emission controls as the Chinese Government pledged to cut carbon emission per unit of GDP by 40 to 50 percent by 2020.

"All of these are pressures, as well as opportunities, urge automakers to make breakthroughs in core technologies of developing new energy vehicles, and boost their application," Jiang Min, a product programming engineer in JAC, told ChinAfrica.

A rise in petrol price since this March further turned the spotlight on new energy cars.

"In the context of soaring petrol demands and a turbulent international situation, it is predictable that the price of petrol, a non-renewable resource, will continue to go up," said Peng Wei, an analyst with Ping An Securities, a Beijing-based market research institution. Peng believes a sustained increase in the petrol price will inevitably change consumers' auto demands, making energy-saving cars more popular.

"New energy cars are bound to be the future trend," said Peng.

The State Council, or China's cabinet, pledged to boost the new energy auto sector in the next few years. It released a plan this April promising China's total production of pure electric and plug-in hybrid electric vehicles would reach 500,000 units by 2015.

According to statistics from the China Association of Automobile Manufacturers, from January to August this year, a total of 6,019 new energy vehicles were sold in China, among which 2,661 were pure electric and 3,358 were hybrid models.