NextEV, a Chinese e-car startup, was created last year as a rival to US electric car company Tesla. It is backed by giant Chinese Internet services company Tencent Holdings Ltd and Hillhouse Capital, a Chinese investment management company.

Last month, Shanghai-based NextEV reportedly raised $500 million from investors including well-known Silicon Valley venture capital company Sequoia Capital.

The creation and growth of NextEV has been supported by the Chinese government, which recently modified regulations to encourage investment by nonautomotive companies, and has also provided generous incentives to encourage production and sales of electric vehicles.

"Incentives are important. Definitely the industry needs help at the beginning, and undoubtedly EV has benefited from the incentives, but I think the next step is regulations and legislation to allow a special area in the city that is open only to EVs, when alternatives to (internal) combustion cars are available," Agag says.

The Chinese government is working hard to fight pollution, he says, and it is important for the industry in China to make the gradual shift to electric cars. If they do, they would lead the rest of the world, he adds.

Electric vehicles produce no pollution at the point of use and can potentially be charged using "green" electricity generated from renewables such as wind and solar.

"By using on-board electrical storage, such as batteries, it is possible to capture the energy in braking that is wasted in conventional vehicles, increasing overall efficiency," Brett says. "Electric cars are also quieter than internal combustion vehicles and have very high torque from the electric motors, which gives impressive acceleration performance."

But there are also challenges, including the electric cars' limited range and the need for better recharging infrastructure.

"When using batteries, the range is much less that can be obtained with conventional vehicles, and the limited recharging infrastructure also contributes to so-called range anxiety. Electric vehicles are also more expensive than conventional cars, but with economies of scale there is no reason why they cannot reach cost parity in the future," Brett says.

Wu adds: "To a certain extent, costs will come down with increased uptake just as they did for batteries in consumer electronics. However, this requires a change in the mainstream perception of the technology."

Despite the challenges, research and development in electric vehicles has progressed significantly in the past few years with the discovery of new materials, optimization of existing technologies to increase energy density, and resolution of engineering challenges such as how to integrate these technologies into real world conditions, Wu says.

More use of electric-vehicle battery technology is inevitable within the next few years, Wu says. "The introduction of the Toyota Prius, which was a hybrid vehicle combining batteries with an internal combustion engine to increase efficiency, was the first significant step toward this to help with the economies of scale to make this technology affordable.

"Soon after, we saw the release of the Nissan Leaf and the Tesla Roadster, which were fully electric vehicles consumers could purchase, and now an increasing number of automotive manufacturers are making either fully electric or hybrid vehicles. I can only see this trend increasing for years to come, especially as emissions targets, climate change and air quality become increasingly important."

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