China's annual production capacity of electric motor vehicles will reach 1 million units by 2020, a senior official forecast.

As the world's largest auto market, new energy vehicles are key to the development of China's auto industry, said Minister of Science and Technology Wan Gang.

Wan said automobile exhaust emissions accounted for 70 percent of air pollution in big cities of China.

While extolling new energy cars, Wan said promotion of public transportation would also help to ease the problems caused by expanding car ownership in China.

Public transport should also be the top priority for use of new energy automobiles in China, he said.

Twenty-five Chinese cities have jointed a pilot program co-sponsored in 2009 by Ministry of Science and Technology, Ministry of Finance, National Development and Reform Commission, and Ministry of Industry and Information, to promote energy-efficient and new-energy vehicles.

The project aimed to replace public transport vehicles with electric vehicles to support the development of electric vehicle industry, Wan said.

A total of 8.5 billion yuan (1.28 billion U.S. dollars) from the capital market has entered the electric car industry since the debut of the project in 2009, he said.

China became the world's largest auto market, as Chinese automakers sold 13.6 million vehicles last year, and the market continued to grow rapidly in the first half of 2010 with sales up almost 48 percent year on year to 9.02 million units.

The government announced in June that it would subsidize the purchase of green cars in a bid to reduce vehicle emissions. Subsidies of up to 60,000 yuan will be given to buyers of completely electric vehicles in pilot cities like Shanghai, Changchun, Shenzhen, Hangzhou and Hefei.