China mulls ban on gasoline and diesel cars

China Fossil Fuel Deadline Shifts Focus to Electric Cars

Kou also added that this development will likely affect the oil exporters as China would require less fossil fuel. The Chinese government is reported to be working with regulators over the timeline for discontinuing production and sales of vehicles running on fossil fuels. Worldwide auto giants like Ford and Volkswagen are aiming to develop fully electric cars in China. Those countries include India, with a target date of 2030, but no hard deadline; Britain, aiming for 2040; France, with a deadline of 2040; and Norway, with the most ambitious target, 2025. Even in Germany, Chancellor Angela Merkel has admitted that it's only a matter of time before the country that invented the modern vehicle sets its own expiry date.

Minister Xin Guobin told Xinhua, China's official news agency, that the policy is aimed to bring 'profound changes for our vehicle industry's development'.

Tesla said in June that it's working with the Shanghai government to explore local manufacturing, a move that would allow it to achieve economies of scale and bring down manufacturing, labor and shipping costs. However, the size of China's vehicle market gives any policy changes an outsize importance for the global industry.

With some of the world's worst urban air pollution, some observers had felt it was only a matter of time until China would make such a move.

Earlier this year, China announced that it would spend more than $360 billion on renewable energy by 2020 and another $300 billion on its "Made in China 2025" program. The agency defines electric cars as ones powered by batteries or hybrid cars that plug into the power source.

China plans ban of petrol cars.

Xin said any resistance to change will mean "turbulent times" for auto companies in coming years.

Automakers have already begun adapting to the shift in vehicle production.

Of the close to 28 million vehicles sold a year ago in China, about 1% were electric. US sales totalled 159,620.

Jin Zheyong, left, and Peter Fleet are all smiles after signing a deal to jointly develop, produce, sell and service EVs in China.

"European carmakers will have to step up their efforts in electric vehicles if they don't want to be chased out of the market, because their current offerings are insufficient", says analyst Stefan Bratzel, head of Germany's Center of Automotive Management.

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