China will step up policy incentives to fuel new energy vehicle (NEV) production and sales, which bore the brunt of the COVID-19 outbreak in the first quarter (Q1), an official said Thursday.

In Q1, NEV sales plunged by 56.4 percent year on year to 114,000 units, while production dropped by 60.2 percent, said Huang Libin, an official with the Ministry of Industry and Information Technology.

The decrease of NEV production and sales totaled 56.9 percent and 53.2 percent, respectively, in March, narrowing from that in February thanks to the recovery of economic activities amid effective epidemic control, said Huang.

The ministry will promote vehicle electrification in public sectors including public transportation, environmental sanitation, postal services and logistics, he said.

Huang also noted that local governments are encouraged to increase subsidies for electricity use and strengthen the construction of NEV charging facilities.

China announced Wednesday it would extend tax exemptions on NEV purchases by an additional two years, which were set to expire at the end of this year.

(Cover: VCG)