The Chinese Government on June 1 announced that it will offer as much as 60,000 yuan ($8,784) in subsidies to anyone who buys new-energy vehicles.

The subsidies, which target plug-in hybrids and pure electric cars, would initially go on a trial run in five cities—Shanghai, Changchun, Shenzhen, Hangzhou and Hefei.

Based on the capacity of the battery packages, a 3,000-yuan ($439) subsidy is offered for each kilowatt-hour for green cars, with a cap of 50,000 yuan ($7,322) for plug-in hybrids and 60,000 yuan ($8,784) for pure electric cars.

The money would go to new-energy vehicle producers so that they could lower the vehicle prices to benefit buyers or leasing companies.

Also, the Central Government will offer 3,000-yuan ($439) subsidies for gasoline and diesel cars with 1.6-liter or less engines that consume 20-percent less fuel than current models.

Jia Xinguang, an independent auto analyst, said the favorable policy would offer an extra incentive for development of the eco-friendly vehicles—the electric car, in particular—but it doesn't mean it's the right time for widespread application.

The market counts on product quality, mature infrastructure, as well as a better understanding among consumers, which will take time, said Jia.