China to subsidize purchases of clean-energy cars

China's central government will subsidize purchases of clean-energy vehicles for public fleets in 13 cities to help the automobile industry develop green technology, the official Xinhua news agency reported.

The trial scheme will promote the use of electric, hybrid and fuel-cell vehicles by public transport operators, taxi firms and postal and sanitary services in cities such as Beijing and Shanghai, Xinhua quoted a finance ministry statement as saying late on Monday.

Subsidies will be based on the gap in prices between more energy-efficient vehicles and those with traditional engines, Xinhua added. Local governments were asked to allocate money to build and maintain facilities for the green vehicles.

Xinhua did not say how many vehicles might be bought under the scheme. Earlier this month the government said it would promote mass production of electric vehicles as part of a plan to help the auto industry ride out China's economic slump.

Expecting such policy support, several Chinese auto makers have launched major plans to make green vehicles.

SAIC Motor Corp, China's biggest auto maker, said in November it would set up a venture with its state-owned parent to invest 2 billion yuan ($293 million) in developing hybrid and electric vehicles.

Last month battery maker BYD Co launched a plug-in hubrid car, China's first homegrown electric vehicle. And in January last year, SAIC's car venture with General Motors rolled out its first locally produced hybrid car and said it planned to introduce fuel-cell vehicles into China after 2010.