A customer prepares to recharge an electric vehicle at Tsinghua University Science Park in Beijing, where 15 electric cars are available for rent. China encourages the use of green vehicles by offering subsidies and simple license procedures for electric-car buyers. [Deng Jia / for China Daily]

In its efforts to increase the number of electric vehicles, or EVs, on its roads over the next five years, Wan Gang, minister of science and technology, said government subsidies are only "short-term solutions", and that the industry can only be sustained and expanded by raising technology levels and lowering costs.

He said direct government incentives for consumers are likely to be phased out by 2020, if operational expenses can be lowered and the market expanded.

He declined to comment on the possible renewal of subsidies on electric vehicles, which expired by the end of 2012.

Central government rebates of up to 60,000 yuan ($9,790) used to be offered on the purchase price of battery-powered cars.

"The government is unwaveringly committed to the industry, but EV makers should never count on subsidies to survive," Wan said on the sidelines of the 2013 International Forum on Electric Vehicle Pilot Cities and Industrial Development in Shanghai on Thursday and Friday.

"It is imperative (for companies) to enhance their core competence with research and innovation."

A recent study by the United Nations Department of Economic and Social Affairs showed that China holds just 1 percent of total patent registrations for lithium ion batteries, a critical component of EVs, while Japan owns 52 percent and the US owns 22 percent.