Major cities are already applying a strict license plate system to limit the number of cars and ease traffic.

Although buyers of new-energy vehicles are exempt from the lottery program for traditional car owners, there is still a scheme in place for new-energy vehicles. Dong is hoping that will scrapped in the near future if the State Council proposals become law.

So far, the government has promoted a series of measures to boost NEV sales in order to combat pollution. These include tax exemptions and subsidies when buying environmentally friendly vehicles.

In the first nine months of the year, domestic auto manufacturers produced more than 144,000 new-energy vehicles and sold about 136,700. That was an increase of more than 200 percent compared to the same period in 2014, data from CAAM showed.

By 2020, the plan is to have annual sales of more than 1 million electric and hybrid models on the road and 3 million by 2025. But there are still huge obstacles to overcome if these figures are to be achieved such as increasing the number of charging stations.

"Our neighborhood is not allowed to install a charging post because of the different voltage," Wu Ying, 34, a bank clerk, who bought an electric car last year, said. "Now, I have to drive a long way every time I need to recharge my car."

Wu's compliant is common among electric vehicle owners. Zhang Xiaoming, managing director of CESVICHINA, an automobile insurance research center, said that there are only about 30,000 charging stations in the country.

"Demand is 20 times higher than that," Zhang said. "There are problems too with batteries in terms of endurance, stability and weight. Many are not able to meet the requirements of long-distance travel."

Price is another key area as buying a new energy car can be up to 50 percent more expensive than a traditional gasoline-guzzling model. Electric buses are also more expensive.

Still, NEVs are the future of the auto industry and Gregoire Blaise, president of Volvo Buses China, is upbeat about growth in the market.

"Buses that use electricity as major fuel will play an important part in China's public transportation system in the future," Blaise said. "Even without subsidies from the government, these kind of buses are bringing a different experience to passengers."