Photo taken on Dec. 4, 2020 shows new energy vehicles (NEVs) during a promotional activity for NEVs in rural areas held in Kunming, southwest China's Yunnan Province. (Xinhua/Jiang Wenyao)

Shanghai has released a plan on Thursday stating that it would increase the annual productivity of new-energy vehicles (NEVs) to 1.2 million by 2025, pushing the industrial output value to 350 billion yuan ($54 billion), equaling over 35 percent of the total automobile manufacturing output in the city.

This is another example of local government effort to increase use of NEVs as China is striving to full its target of making NEV sales around 20 percent of its overall NEV sales by the end of 2025. 

According to the aforementioned plan, NEVs will account for 50 percent of newly purchased private cars, 80 percent of government cars and 50 percent of cars used by ride-hailing services by 2025

10,000 new charging piles will be built and upgraded and 70 hydrogenation stations will be constructed by 2025, based on government requirements. 

Shanghai will encourage domestic and foreign enterprises to invest in vehicle manufacturing and R&D projects in Shanghai, building Anting in Jiading district, Lingang New Area and Jinqiao area in Pudong into a world-class new energy vehicle industry cluster. 

New energy vehicle enterprises in Lingang New Area involved in manufacturing core components such as integrated circuits and artificial intelligence can enjoy a tax reduction rate of 15 percent within five years from the date of establishment.

New energy car talent who meet certain requirements will be eligible for government incentives including being able to register as local residents directly, said the government. This policy can help solve the children's education issue and house purchase qualification for people from other provinces. 

Wu Shuocheng, an independent car analyst, said that though the 1.2 million NEVs goal which seems to be ambitious is likely to be achieved.

"Shanghai is home to large companies such as SAIC Motor and Tesla which have seen their NEV productivity expanding quickly in recent years," Wu told the Global Times. 

The promotion of new energy vehicles (NEVs) plates, which are not subject to license plate restrictions on Shanghai's elevated ring roads, will also continue to boost the demand of NEVs, he added.

In 2020, Shanghai promoted 121,000 new energy vehicles, a year-on-year increase of 92 percent, ranking first in China and the world in terms of total scale. 

By the end of 2020, more than 370,000 charging piles (vehicle to pile ratio about 1.1:1) and 9 hydrogenation stations have been built, providing strong support for the expansion and application of new energy vehicles, the government said.

Global Times