China is considering providing as much as 100 billion yuan ($16 billion) in government funding to build electric-vehicle charging facilities and spur demand for clean cars, according to two people familiar with the matter.

The policy will be announced soon, said the people, who asked not to be named because the discussions are private. The people declined to provide further details of the plan such as how long the program would last or whether the chargers would be compatible with cars made by Tesla Motors Inc.

Increased state funding would be a tailwind for carmakers coping with consumer concerns over the price, reliability and convenience of electric vehicles. It would also build on efforts by China, the world’s biggest carbon emitter, to fight pollution and cultivate its local EV industry, which includes BYD Co. and Kandi Technologies Group Inc. Kandi rose 4.5 percent to $19.09.

“Charging infrastructure and EV growth is a chicken-and-egg situation,” said Ashvin Chotai, managing director of researcher Intelligence Automotive Asia.

“It’s got to be a gradual process to scale up both EV sales as well as charging infrastructure. EVs are still not very attractive when compared with conventional-powered cars.”

Two calls to the news office in the Ministry of Finance went unanswered after regular business hours.

A fax seeking comment from the ministry didn’t get an immediate reply.

Among recent government initiatives, China will exempt new- energy vehicles ― defined as electric cars, plug-in hybrids and fuel-cell vehicles ― from a purchase tax starting next month, and has ordered government departments to buy such vehicles for their official fleets.

Supporting a strategic and emerging industry like new- energy vehicles is a win-win for industrial development and environmental protection, the central government said last month in the statement announcing the waiver of the purchase tax. (Bloomberg)