China agrees to delay electric car quota by a year: source

BERLIN/RASTATT (Reuters) - China agreed to delay an 8 percent quota for electric and hybrid vehicles by a year until 2019, an auto industry source said on Friday, in a major concession for German carmakers seeking to expand in the world’s largest auto market.

In a draft in September, Chinese policymakers proposed that 8 percent of automakers’ sales be battery-electric or plug-in hybrid vehicles by 2018, sparking protests from domestic and international carmakers.

After a meeting with German Chancellor Angela Merkel in Berlin on Thursday, Chinese Premier Li Keqiang said a “solution” for implementing the quotas had been found, though he gave no details.

As part of a compromise deal, German carmakers who fail to fulfill the quota in the near term will be able to offset penalties by ramping up electric vehicle deliveries at a later date, the industry source said.

Daimler Chief Executive Dieter Zetsche said earlier on Friday that China had agreed to adjust the pace of introducing stringent domestic quotas for electric car sales.

The concession followed an auto industry lobbying effort before this week’s Germany-China summit.

Asked what had been agreed between Germany and China, Zetsche told Reuters: “What we talked about was the timeline, the pace of this transition. I think we reached a result which is satisfactory for everybody.”

Zetsche said that he could not give further details given that the Chinese and German participants in the negotiation had also not divulged details of the compromise.

Maintaining and extending its current strong position in China is crucial for Germany's auto industry, led by Volkswagen VOWG_p.DE, Daimler and BMW, and its broader economy.

Handelsblatt, citing industry sources, said China had agreed to delay the introduction of the rule by a year and allow firms to make up for inadequate electric sales volumes later. Measures were also being investigated to allow German firms to limit their transfer of technology to China, Handelsblatt said.

Reporting by Andreas Cremer, Ilona Wissenbach in Stuttgart and Thomas Escritt in Berlin; Writing by Edward Taylor; Editing by Mark Heinrich and Adrian Croft