Government subsidies for electric vehicles were initially the key factor in attracting competitors from outside sectors – like the internet and real estate – to join the market. But as the government gradually phases out the subsidies, these non-traditional players are facing new challenges.

Mr. Ma from Hangzhou has been considering buying an electric vehicle for a while. But news that the government is now cutting subsidies prompts him to have second thoughts.

"Earlier I thought an electric car would be cheaper with state subsidies. But if there are no subsidies, I prefer to choose a gasoline-powered car of similar price,” he said.

The subsidy cuts aren't only affecting consumers. It also means more challenges for non-traditional companies who have invested in the market. To retain their competitiveness, most of these firms choose to cover the cost of the subsidies that customers used to receive from the government, meaning they have to invest huge amounts of their own money to maintain a lower price.

"Fewer subsidies or even no subsidies, our price won't change," said Du ligang, co-founder of Weltmeister motor. He thinks the new policy will make the industry more market-oriented and speed up its reshuffle.

"It's a good thing for the industry as a whole. It has forced us to make more innovative progress and enhance our competitiveness while facing traditional players in the market,” Du said.

In the first half of this year, the total sales volume of electric vehicles produced by non-traditional companies was about 32,000, about seven percent of the market share. Analysts believe these new competitors have unique advantages, such as faster development of new products and better leveraging of the internet, but it is a long-term process to transform innovation and design into mature products.