China eases German automakers' fears on EV quotas

China has promised that German automakers will not be discriminated against in the electric-car market, Germany's economy minister said in Beijing on Wednesday.

German Economy Minister Sigmar Gabriel met with Chinese Industry Minister Miao Wei on a trip to Beijing, where they discussed China's plans to set quotas for electric cars and attach conditions that worry German carmakers.

The quotas would require that a certain number of cars built in China to be zero-emission vehicles, starting in 2018, regardless of who builds them, the Germany newspaper Sueddeutsche Zeitung reported on Tuesday, citing a draft law by the Beijing government.

Carmakers not complying with the quotas system could be forced to curtail production in China, the newspaper said, without being more specific.

Miao "indicated that he does not share the impression that we have, that our auto industry would be excluded in the planning of new driving technology," Gabriel said.

Miao said any German carmaker that produced in China would be treated on an equal basis with Chinese companies, Gabriel added.

Volkswagen Group and Daimler have been taking steps to expand capacity in China where strong auto demand has helped carmakers offset falling sales in South America and other regions. But electric-vehicle production remains at a fledgling stage.

VW, Europe's biggest carmaker and one of the first global automakers to set up production facilities in China during the 1980s, signed a preliminary deal with China's Anhui Jianghuai Automobile (JAC Motor) only two months ago to explore making electric cars in a joint venture.

The head of Germany's main car industry lobby on Tuesday reiterated the significance of smooth business conditions in China for Germany's auto firms.

"We count on China to ensure reliable competition and fair market access also for non-Chinese companies, as well as to make non-discriminating arrangements," Matthias Wissmann, president of the VDA auto industry association said.

Global auto brands are only allowed to manufacture cars in China through joint ventures with local partners and typically are limited to two partners. VW already has joint ventures with SAIC Motor and China FAW Group.

Gabriel said German automakers have no reason to be worried that China would differentiate between German and Chinese firms.

"He said that was not the case," Gabriel told reporters, adding that German companies were not obligated to use Chinese suppliers.