China has "too many" electric vehicle (EV) makers and the government will encourage consolidation, Industry and Information Technology Minister Xiao Yaqing said on Monday.
The minister also said China would improve its charging network and develop EV sales in rural markets.
The government's promotion of greener vehicles to cut pollution has prompted electric car makers such as Nio, XPeng and BYD to expand manufacturing capacity in China.
Xiao said the ministry was speeding up alternative solutions to address an auto chip supply shortage.
China's market regulator last week fined three auto chip sales companies for driving up prices, in a move to help auto production in the world's biggest vehicle market.
A prolonged global chip shortage has affected major automakers, including Ford Motor, Honda Motor, and Volkswagen, forcing many to idle or curtail production