"China's auto industry is caught in a dilemma in the wake of energy supply strains, deteriorating environment and traffic woes," said Cui Jingshu, an auto dealer in northeastern Jilin province.
National Energy Administration head Liu Tienan said the auto industry is a heavy user of resources and contributor to pollution, Xinhua reported.
"The country saw an increase of 100 million tons in oil production capacity during the 2006-2010 period, only enough to meet the demand of newly increased autos," Liu said.
He said China's primary energy consumption rose 5.9 percent year-on-year to 3.25 billion tons of coal equivalent last year, making it the world's second-largest energy consumer after the United States.
Earlier this month, Liu Shijin with the Chinese Cabinet's Development Research Center said the country's annual auto sales, already the most in the world at more than 18 million units, are forecast to reach 50 million by 2021.
Jiang Jun, a researcher with Jilin Academy of Social Sciences, said at the rate of 1 ton of oil for each car per year, the current 200 million tons of annual gasoline and diesel oil supply can only support a maximum of 200 million vehicles.
Jiang said vehicle exhaust has become a major source of air pollution in the country.
"About one-third of the 100 major cities across the country failed to meet air quality standards during recent years, for which vehicle emissions should be blamed," he said.
The country has pledged to reduce both energy consumption and carbon emissions per unit of economic output by 18 percent over the next five years.