Led by strong demand in China, Japan and other Asian countries along with the various national-level initiatives and programs to promote the awareness on electric vehicles will help the Asia-Pacific region to surpass 1.4 million units in next five years, said a new report from Pike Research.

Two key drivers of EV adoption include climate concerns and oil prices, stated senior analyst Andy Bae.  The potential for reducing carbon emissions by electrifying transportation has caught the attention of local and national government officials across Asia Pacific due to concerns about the contribution of transportation emissions to climate change.

Significant barriers to plug-in electric-vehicles still exist in the form of consumer concerns about effective driving ranges as well as a near-term shortage of charging stations, the report said.

The report notes that China will be the largest Asia Pacific market for PEVs over the next five years, representing 53% of the region's total sales during that period.  The vast majority of China's PEV fleet will be battery electric vehicles (BEVs), driven by a strong push behind this category by the central government.  In contrast, plug-in hybrid electric vehicles (PHEVs) will be the largest category in Japan, which is expected to be the region's second-largest market for all PEVs.

Earlier, China had said annual production of electric vehicles will hit one million units by 2020 and become world's largest auto market for new energy vehicles, which will hold the key for the development of the country's auto industry.

The Chinese government is developing the industry of energy-saving and new-energy vehicles as part of its green drive. A pilot program has been set up to promote energy-efficient and new-energy vehicles in 25 cities and popularize use of electric vehicles with the government providing subsidies for buying vehicles.

The development of electric vehicles is likely to get a further boost following the Chinese science and technology ministry's plans to revise policies for its development between 2011 and 2015.

An estimated 8.5 billion yuan ($128.3 billion) has entered the electric car industry so far from capital markets. This fund is likely to help build up the country's battery output, which will be capable of supplying 150,000 electric vehicles by October 2011.

China has the world's second largest number of vehicles after the United States and is also world's largest auto market. With its economy projected to continue growth during the next decade, China faces a daunting task in reducing emission of greenhouse gases and conservation of energy.

The governments across the world have set aside billions of dollars in the form of subsidies for early adopters of these alternative energy cars and to boost production of batteries for such vehicles despite persisting doubts about how many people would actually buy them.