Guangdong plans to spend 57.3 billion yuan (HK$70.82 billion) over the next 10 years to lead the mainland in producing new-energy vehicles, but will still fall far short of the sales target.
Despite support from carmakers such as BYD and Dongfeng-Nissan, its expected sales of electric vehicles and plug-in hybrid cars will reach only a tenth of the State Council's target of 500,000 units by 2015.
Shenzhen-based BYD, whose net profit tumbled 94 per cent last year, said recent strong car sales would raise net profit by up to 4.2 times in the first quarter.
Group chairman Wang Chuanfu said a new round of government incentives on new-energy vehicles is expected to be announced next month, which should boost sales of its next-generation electric car, called Qin , which goes on the market later this year.
The Guangdong government has pledged to promote green vehicles before the release of the mainland's subsidy policy. Apart from price incentives, buyers of "green" cars will also be given priority in registration.
The government could also consider waiving tolls and road charges for them.
Guangdong expects the production capacity of its new-energy vehicles to reach 200,000 by 2015 but expects to sell only 50,000 units.
Car analysts have always been sceptical about the target as charging facilities and relevant infrastructure are still lagging behind.
Two years ago, Beijing selected 25 pilot cities to promote the use of green vehicles. Apart from subsidies from the central government, these cities also offer their own subsidies to car buyers. However, only 27,432 electric cars and plug-in hybrid cars were sold as of January - about half of Beijing's target of 53,000 by 2012.
John Zeng, of car consultancy LMC Automotive, said the local subsidy policy of pilot cities like Shenzhen or Shanghai would slow down the commercialisation of electric vehicles as much as promoting them.
"Shenzhen has one of the world's largest and most successful pilot programmes, However, BYD's e6 [the model Shenzhen promotes the most] has not been promoted outside Shenzhen and has not enjoyed subsidies in Shanghai." Zeng said.
"In Beijing and Hangzhou, it's the same story: only local models enjoy local subsidy," said Zeng, adding that local protection would continue to hinder the development of new-energy cars.