China will gradually lift restrictions on the purchase of new-energy vehicles in various regions, according to a decarbonization action plan released on Wednesday, which is set to offer another major boost to the industry.

The move comes after the US and the EU have taken protectionist moves against Chinese electric vehicles (EVs) based on claims of "overcapacity" in China, with Washington imposing steep tariffs on Chinese EVs and Brussels launching a so-called anti-subsidy probe into Chinese EVs.

The plan to lift restrictions on purchases of new-energy vehicles in various major cities that have a long waiting list for being eligible to buy a car could potentially unleash huge demand, effectively debunking the so-called overcapacity fallacy.

China's State Council on Wednesday unveiled a detailed action plan to cut carbon emissions in 2024 and 2025, with major goals in cutting fossil fuel consumption, increasing the use of clean energy and upgrading steel and other industries.

The plan includes major steps to reduce carbon emissions in the transport industry, with concrete plans for infrastructure upgrades and the promotion of new-energy vehicles.

The plan also said that China will accelerate the elimination of old motor vehicles and tighten the energy consumption limits for standard fuel vehicles, while also gradually lifting restrictions on purchases of new-energy vehicles in various regions.

The move drew positive feedback on Chinese social media platforms, with some welcoming the "exciting news" that they may soon be able to purchase a new-energy vehicle.

Currently, some major cities like Beijing have a long waiting list to buy a new-energy vehicle, as they previously sought to limit the number in order to address traffic congestion. The action plan did not specify which regions will lift the restrictions.

But the plan is widely expected to offer another boost to China's EV sector, even as it faces protectionist moves by the US and the EU. China's EV exports have maintained robust growth, surging 58 percent in the first four months, according to industry data.

The action plan also said that China will reduce carbon emissions in the transport sector. A Chinese auto industry insider suggested to the Global Times recently that China should consider raising the temporary tariff rate on imported cars with large-displacement engines, in order to reduce imports and help the country's broader efforts to cut emissions and promote the green development of the auto industry. The move could have a major impact on car imports from the EU as well as those from the US.

（Picture: Veer）