Changan Automobile production line (Photo/liangjiang.gov.cn)
The segment of the auto industry that makes new energy or electric vehicles rode the government's favorable policies last year to big increases in both sales and output, which is expected to double 2015 net profit of 11 listed companies.
China quadrupled 2015 output of new energy vehicles or NEVs to 379,000, according to data from the Ministry of Industry and Information Technology.
In December alone, the country produced 99,800 new energy cars, triple the level of the same month in 2014. The China Association of Automobile Manufacturers said full-year output of new energy cars reached around 330,000 units.
For the first 10 months of last year, sales of NEVs reached 171,145, up 290 percent year-on-year. Auto industry-wide market share of NEVs rose to 0.88 percent.
Analysts said the output and sales of new energy cars will continue to increase this year on the back of encouraging policies and market recognition.
China has many supportive regulations for the NEV industry, including more than 17 national-level policies.
Starting from Jan 1, residents in Beijing have been able to buy new energy cars without having to obtain in advance a license plate through the lottery system, unlike buyers of all types of cars.
The waiting period for a driver's license is usually two to five years. So, it is expected that prospective buyers of petrol or diesel cars might consider buying new energy cars instead.
The Beijing local transport authority will issue 60,000 license plates this year for new energy cars on a first-come, first-served basis.
It has also reduced this year's license plate quota for gasoline cars by 30,000, reflecting the government's determination to reduce hazardous emissions. This move is also expected to support the new energy vehicle industry.
In line with China's stock-market weakness, shares of new energy vehicle makers declined this month. But those of 11 profit-bound NEV makers performed better than others on the Shanghai Stock Exchange, according to the Securities Daily.
For instance, Xiamen King Long United Automotive Industry Co Ltd, Guangzhou Automobile Group Co Ltd and BYD Auto Co Ltd declined less than 10 percent while the Shanghai Composite Index dropped by around 15 percent so far this month.
Last week, around 30 new energy vehicle-related companies published their annual reports showing profits.
The Jiaozuo, Henan province-headquartered Do-Fluoride Chemicals Co Ltd, a producer of chemical materials for electric vehicle batteries, reported a whopping 850 percent year-on-year rise in its estimated 2015 net profit of about 40 million yuan ($6.3 million), according to the company's announcement in November last year.
Analysts said there are investment opportunities in many NEV-related sectors such as storage batteries, cathode material and lithium.