The plan also says that China will forge an industrialization and innovation framework for the industry and help Chinese auto brands produce cars that are in line with global standards.

Local governments have also been helping the new-energy vehicle industry through the use of subsidies. Some cities grant free license plates to new-energy vehicle buyers but auction off plates to purchasers of gas-based vehicles.

Recently, the Beijing government announced that pure electric cars will not be included into its policy banning private cars from hitting the urban road one workday a week, based on the last digit of the license plate.

But there are many challenges for the industry.

"New energy vehicles are generally double the price of conventional cars and many potential buyers are still concerned that they will not be able to recharge their batteries quickly enough to complete long journeys," Nicholls said.

They also worry about the lack of supporting infrastructure, while many are concerned that the technology is too underdeveloped to provide the kind of driving experience they are used to, she added.