China has aggressively promoted battery electric and plug-in hybrid cars, including spending billions of dollars in subsidies, in an effort to cut heavy urban smog and promote technological innovation in its auto sector.

Xu said battery production costs for Beijing Electric Vehicle Co, which is backed by the group's listed subsidiary BAIC Motor Corp, are dropping by 15-20 percent per year.

Its battery costs have more than halved to 1,500 yuan to 2,000 yuan ($215-$290) per unit in the last three or four years, he said, and will soon be near 1,000 yuan per unit.

While the central government is phasing out green car subsidies through 2020, the firm will need government support for only three more years at most, said Xu, who is a delegate to China's parliament, on the sidelines of the legislative session that runs until March 15.

"People are wondering, at the end of 2020 when overall government financial support will end, will the new energy vehicle industry fall off a cliff?" Xu said.

"There is no chance that will happen."

China's state-owned regulator has given Beijing EV approval to allot shares to certain management and technical employees as part of government moves to introduce mixed ownership to state-owned firms like Beijing Auto.

($1 = 6.8950 Chinese yuan renminbi)

(Reporting by Yawen Chen and Jake Spring; Editing by Ruth Pitchford)

By Yawen Chen and Jake Spring