Following policy directives outlined in this year’s National People’s Congress (NPC) and Chinese People’s Political Consultative Congress (CPPCC), domestic and international firms have been given the green light to step up commercialization of alternative energy vehicles for sale in China’s market.

The shift in the government’s attitude regarding green vehicles was highlighted in Chinese Premier Wen Jiabao’s March 5 report as well as the draft of the country’s 12th Five-Year Plan. The proposed policies encourage enterprises to expeditiously pursue the commercialization of alternative energy cars.

In addition, as part of the Five-Year plan, the National Development and Reform Commission included a low carbon footprint to build an energy-conscious, ecologically friendly society.

With the go-ahead from the highest authorities, Chinese companies are now battling for a share of the green car market. Domestic players, including leading auto maker SAIC Motor Corp and rising star Geely Automotive Holdings are showing off a host of new alternative energy vehicles.

"There are big opportunities to grow the green car market in the next five to 10 years," said Li Shufu, president of Geely Automotive Holdings.

"We have increased the investment and support to boost our [alternative] energy products, from sedans and small cars to trucks and buses,"Xu Jianyi, chairman of the Board of First Automobile Works (FAW) Group Corporation, China’s top automobile company, told China.org.cn. "As one of China’s largest carmakers, our innovations have covered all [types].”

International firms are also vying for a piece of the pie. At last year’s Beijing International Automotive Exhibition, FAW-Volkswagen launched its E-Lavida electric car. Volvo is also planning to launch clean-energy cars in China, joining a growing crowd of players eager to take advantage of generous government incentives.

Xu said the new government policy was the "right direction"for China, as it hopes to take the lead in transportation innovation and sustainable development.

"Cutting carbon emission will be a main task and new energy vehicles are a good solution,"Xu said. "The earlier carmakers invest the better market reward they will get.”