BEIJING -- China is considering providing as much as 100 billion yuan ($16.27 billion) in government funding to build electric-vehicle charging stations and spur demand for clean cars, according to two people familiar with the matter.
The policy will be announced soon, said the people, who asked not to be named because the discussions are private. The people declined to provide more details of the plan.
Increased state funding would be a tail wind for carmakers coping with consumer concerns over the price, reliability and convenience of EVs. It also would build on the tax breaks announced by China, the world's biggest carbon emitter, to fight pollution and cultivate its local EV industry.
While sales of EVs in China have lagged behind government targets, BYD Co., the EV maker partially owned by Warren Buffett's Berkshire Hathaway Inc., this month cited favorable government policies for helping the company's EV sales jump sixfold during the first half of the year.
The government has recently introduced "unprecedented" beneficial policies for EVs, spurred by concerns including energy security and pollution, BYD Chairman Wang Chuanfu said on Tuesday. There are also a lot of obstacles, among them a lack of recharging stations, he said in a briefing in Shenzhen.
At that briefing, Wang unveiled his plans for Denza, the joint EV brand between BYD and Daimler. The brand will launch sales next month in Beijing, Shanghai and Shenzhen.
In May, BMW China chief Karsten Engel said China will become the world's largest market for EVs within five years as more charging stations are built and the government promotes cleaner cars.
BMW plans to sell its electric i3 city car in China this year.
"Charging infrastructure and EV growth is a chicken-and-egg situation," said Ashvin Chotai, managing director of researcher Intelligence Automotive Asia.
"It's got to be a gradual process to scale up both EV sales as well as charging infrastructure. EVs are still not very attractive when compared with conventional-powered cars."
Two calls to the news office in the Ministry of Finance went unanswered.
Starting in September, China will exempt new-energy vehicles -- defined as EVs, plug-in hybrids and fuel-cell vehicles -- from a sales tax.
Supporting an emerging industry such as new-energy vehicles is a "win-win" for industrial development and environmental protection, the central government said last month in a statement announcing the waiver of the sales tax.
China also has ordered government departments to buy greener vehicles for their official fleets. Last month, China's central government set a target for EVs to make up at least 30 percent of government vehicle purchases by 2016. The ratio will be raised beyond 2016, when local provinces are required to meet the target.
In June, the China Automotive Technology and Research Center said it also may allow companies that are not automakers to manufacture EVs. That would pave the way for the likes of Wanxiang Group Corp., the Chinese supplier that owns Fisker Automotive, to build EVs in China.