Daimler plans to start a pilot programme for its electric Smart minicar in China next year, joining a growing list of automakers evaluating the potential of next-generation clean-energy vehicles in the world's biggest car market.

Daimler is currently considering which cities to test the cars in, Ulrich Walker, chairman of Daimler Northeast Asia, told Dow Jones at a year-end briefing.

"We have to see the acceptance of this car," he said. "Who are the target groups? What kind of infrastructure do we need?"

The moves follows an announcement by the central government last week that it would subsidise private purchases of alternative-energy vehicles in five cities.

Auto makers such as BYD, which plans to market all-electric battery cars and plug-in hybrids, have said government subsidies are key if pricey alternative-energy vehicles are to be feasible in China on a large scale for consumers and producers.

"We think there are opportunities for electric (vehicles) in China and we are exploring opportunities," Beijing-based Daimler spokesman Trevor Hale said.

The Mercedes-Benz unit currently sells the S400 Hybrid in China, which is based on conventional hybrid technology.

Nissan Motor said last month it would test-market its Leaf electric car in China in 2011 by making it available to government agencies and other fleet customers in the city of Wuhan.

General Motors intends to mass-market the plug-in hybrid electric 'range extender' Chevrolet Volt in China, starting in 2011. The Volt is powered by lithium-ion batteries and has a supplementary petrol generator.

Toyota Motor has also said it would likely test-market a plug-in hybrid in China and has just begun a test programme in Europe.