China makes concessions to Germany to boost e-car production

Germany has persuaded China to make concessions on its proposed quotas to encourage the production of electric vehicles, Chinese Premier Li Keqiang and Chancellor Angela Merkel said after talks in Berlin on Thursday.

Li told a joint news conference he had discussed the issue at a dinner in Berlin on Wednesday and China had agreed to make concessions to automakers, without giving details.

Merkel said Germany and China had similar goals when it came to promoting electric vehicles, but said she wanted to make sure there were good conditions for German automakers in China, saying she was optimistic for a positive solution.

Germany has been lobbying hard since China released a draft policy in September to set a target for 8 per cent of automakers' sales to be battery electric or plug-in hybrid vehicles by 2018, rising to 10 per cent in 2019 and 12 per cent in 2020.

Reuters reported in March that China could consider pushing back the 8 per cent target to 2019 after the automotive industry criticised the scale and pace of the plans.

New energy vehicles last year accounted for just 1.8 per cent of sales in the world's biggest auto market, according to Reuters calculations based on official data.

Automakers and industry bodies have said the targets are too tough, while German policymakers say they fear they are part of a Chinese strategy to help domestic carmakers overtake global rivals in the 'green' vehicle sector.

At the meeting in Berlin, German carmaker Daimler signed an agreement with its Chinese joint venture partner BAIC Motor Corporation to upgrade the Mercedes-Benz factory in Beijing to make electric cars.