All 30 electric-powered taxis in the eastern Chinese city of Hangzhou were taken out of service after one cab's engine compartment caught fire, the China Business News reported on Wednesday.
No one was hurt when the car, made by a tiny private firm, Zotye Auto, started burning on Tuesday while it was on a city road, the newspaper said.
Zotye president Jin Zheyoung said a faulty battery might have caused the fire but did not elaborate, it said.
Zoyte and public transportation authorities in the Chinese city could not be reached immediately.
China launched a pilot programme in five cities last year to provide subsidies to buyers of electric and hybrid cars, as it stepped up efforts to cut emissions in the world's biggest auto market.
Warren Buffett-backed BYD and other Chinese automakers have started making hybrid or electric cars on a small scale, but there have been few sales due a lack of charging facilities, quality concerns and range anxieties.
Of the 30 electric-cab fleet in Hangzhou, 15 of the cars were made by Zotye, it added.