On Feb 24, the State Council executive meeting agreed on five measures to support the new energy vehicle industry, a structural optimization to boost green development.

According to the meeting, as an important part of cultivating new economic driving forces, the development of new energy vehicles can help protect and improve the environment.

Since 2014, China has witnessed dramatic developments in the new energy vehicle industry. In 2015, China topped the world in terms of both annual sales of new energy vehicles and accumulated sales over the years, surpassing the United States.

The Ministry of Industry and Information Technology’s statistics show the in the first month of 2016, China manufactured 16,100 new energy vehicles, a 144 percent year-on-year growth.

Among the measures brought up at the State Council executive meeting, the first one is aimed at boosting “revolutionary breakthroughs” in batteries.

“The target of this measure is to ‘fuel’ the promotion and application of new energy vehicles, not only as the costs of manufacturing the battery of new energy vehicles needs to be reduced while improving its efficiency, but also problems of durability, environmental adaptability, and safety,” said analyst Wang Jiahong.

According to the State Council’s measures, a platform of innovation in developing power batteries will be established that involves the participation of enterprises, colleges and research institutes. The central government will award enterprises in terms of functionality and sales of batteries.

Wang said that this means the focus of government support for battery manufacturing moves from pre-research special subsidies to rewards after research and development, which helps improve the efficiency of financial support.

Charging infrastructure for new energy vehicles is also covered by the State Council’s new measures, as the central government will support the initiative through investments and special financial bonds on power distribution networks.

Currently, cities such as Beijing, Chengdu and Shenyang have carried out reward and subsidy measures on charging infrastructure for new energy vehicles, but most of the measures are focused on equipment and construction costs, according to Zhang Juan from the China Committee of Electric Vehicles 100 Members, known as China EV100.

“In comparison, the new measure, which stipulates the subsidy based on charging volume, is more feasible because it can avoid subsidy waste due to longtime unused or improper management,” she said.

The State Council executive meeting put forward five measures regarding the new energy vehicle industry:

First, achieve revolutionary breakthroughs in power batteries. A platform of innovation in developing power batteries will be established, involving the participation of enterprises, colleges and research institutes. The central government will award enterprises in terms of functionality and sales of batteries.

Second, improve the infrastructure for battery charging. More facilities will be built in residential districts, parking lots of enterprises and airports. The central government will support the initiative through investments and special financial bonds on power distribution networks.

Third, expand the proportion of new energy vehicles in urban public transport, taxis and logistics of transportation. The number of new energy vehicles purchased by the central government and local governments where the policy is promoted should account for more than 50 percent of total new vehicles.

Fourth, improve the overall quality of new energy vehicles. The State Council urged improving entry standards, strengthening quality supervision, integrating new energy vehicles with the Internet of Things, as well as establishing mechanisms such as punitive compensation.

Fifth, improve supporting policies such as financial subsidies. New energy vehicles are not subject to purchase quotas or certain traffic control measures. Social capital is encouraged to invest in construction of charging facilities and battery recycling.