(Yicai) March 8 -- Shenzhen in southern Guangdong province became China's largest new energy vehicle production city for the first time last year, surpassing Shanghai and Xi'an.

Shenzhen produced nearly 1.8 million NEVs last year, up 104 percent from a year before, according to the local bureau of statistics. Meanwhile, the NEV output in Shanghai rose 35 percent to almost 1.3 million units, and that in Xi'an fell 3.1 percent to about 983,800 units.

The three top NEV producing cities accounted for 43 percent of China's total last year.

Shenzhen's advantage lies in having the world's most complete NEV ecosystem, Wei Fulei, director of the finance, taxation, trade, and industrial development center of the China Development Institute, told Yicai. A total of 24,000 enterprises related to the NEV industry have clustered in the city, he added.

Shenzhen has developed a supply chain centered around battery, motor, electronic control systems, intelligent connectivity, intelligent cockpit, and autonomous driving, and achieved electrification of public transportation, taxis, and ride-hailing vehicles, with a new energy passenger car penetration rate of nearly 68 percent last year, Wei noted.

However, the foundation of Shenzhen's traditional automobile industry remains weak, and the only dominant player in its car manufacturing sector is BYD, Wei said about the city's weaknesses.

Meanwhile, Shanghai relies on the vehicle factories of Tesla and SAIC Motor, as well as other auto parts companies, such as Bosch and Continental, leveraging the automobile industry ecosystem in the Yangtze River Delta Region. The city is also a leader in the field of intelligent connected vehicles, Wei pointed out.

Leading carmakers in Shanghai are mainly foreign and state-owned enterprises, with a smaller presence of private firms, Wei noted, adding that the city should encourage and support private capital to enter the local NEV sector.

Xi'an developed a NEV industry focused on new energy passenger vehicles, power batteries, and key components, with carmakers BYD and Zhejiang Geely Holding Group at its core, Wei said. The city's weaknesses lie in insufficient innovation, research, and development capabilities, a weak auto industry cluster, and a low supporting rate, he added.

Hefei, Changsha, Guangzhou, Chongqing, and Liuzhou are other Chinese cities that are speeding up the development of their NEV manufacturing industry.

Last year, China's production and sales of NEVs both exceeded nine million units, ranking first in the world for the ninth consecutive year and accounting for over 60 percent of the global total.

Editor: Futura Costaglione