China has announced an ambitious plan to require all new car sales in 2035 to be either hybrids or new-energy vehicles (NEVs), in a move that is likely to have important consequences for global auto brands.

According to a blueprint released this week by the Society of Automotive Engineers of China (SAE-China) and the Ministry of Industry and Information Technology, hybrids and NEVs – electric, plug-in hybrid or fuel cell-powered – will each account for around half of total new sales in 15 years’ time, Caixin reported.

Even though sales of NEVs slumped by almost 40% in the first five months of this year – in yet another negative impact from the coronavirus pandemic – the report authors expect the sector to bounce back in the world’s largest car market, registering annual sales growth of 20% by 2025 and 40% by 2030.

And they predict demand for completely electric cars to be particularly strong, with battery-only cars accounting for 95% of NEV sales by 2035.

Meanwhile, hybrids are expected to be the only petrol-powered vehicles sold in 2035, as conventional gasoline vehicles are phased out, and they are expected to account for 75% of all petrol cars by 2030 and 100% by 2035.

The plan fits with China’s determination to clear up the air pollution that blights many of its cities as well as with President Xi Jinping’s recent announcement that the country aims to achieve carbon neutrality by 2060, with its CO2 emissions peaking before 2030.

It is also likely to be good news for global brands that are already diversifying into hybrid and electric vehicles. In Japan, for example, these eco-friendly vehicles accounted for 39% of car sales in 2019 and the Japanese government intends to raise the proportion up to 70% by 2030, Nikkei Asian Review reported.

Germany’s Volkswagen, the world’s largest carmaker, has also started selling its first mass market electric vehicle, the ID. 3, and the company expressed cautious optimism yesterday about its business prospects for the remaining quarter of the financial year.

Sourced from Caixin, Nikkei Asian Review, Financial Times