The Ministry of Industry and Information Technology, China's top industry regulator, said on Monday it encourages mergers and reorganizations in the new energy vehicle sector, as the number of NEV companies in the nation is now too large.

Xiao Yaqing, minister of industry and information technology, said currently there are many NEV makers, and most are scattered with small status.

The ministry encourages enterprises to have mergers and reorganizations to become stronger and bigger, Xiao said.

Currently, all parties are enthusiastic about the development of NEVs and have greatly promoted the development of the industry. But the sector is very technology-heavy, and resources should be market-oriented as much as possible to avoid dispersion, Xiao added.