China says its tough new sales targets for electric and hybrid cars will apply within two years.

China has set a deadline of 2019 to impose tough new sales targets for electric plug-in and hybrids vehicles, slightly relaxing an earlier plan to launch the rules from next year that had left global automakers worried about being able to comply.

Car makers will need to amass credits for so-called new-energy vehicles (NEVs) equivalent to 10 per cent of annual sales by 2019, China’s industry ministry said in a statement on Thursday. That level would rise to 12 per cent for 2020.

A single vehicle can generate multiple credits meaning the proportion by NEVs by volume would likely be lower.

The targets, announced by the Ministry of Industry and Information Technology (MIIT), closely mirror previously announced plans, but remove an explicit 8 per cent quota for 2018, in effect giving carmakers an extra year grace period.

The quotas are a key part of a drive by China, the world’s largest auto market, to develop its own NEV market, with a long-term aim to ban the production and sale of cars that use traditional fuels announced earlier this month.

Global automotive manufacturers, however, had urged a softening of the proposals for all-electric battery vehicles and electric plug-in hybrids.

Under the rules, car makers will receive credits for new-energy vehicles including plug-in hybrids and fully electric cars that can be transferred or traded. Firms with annual sales volumes above 30,000 units will need to comply with the targets.

These credits – which will vary depending on the range and performance of the vehicle – will be used to calculate if firms have met their quota, a system which would likely mean the actual proportion NEVs made up of total sales was lower.

“The rules could result in the production of more than one million EVs annually in China by 2020, or about 4 per cent of sales,” Simon Mui, a transport and energy exert at the US-based Natural Resources Defense Council wrote in note.

AAP

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