GUANGZHOU/BEIJING: Germany’s Daimler AG plans to invest 5 billion yuan (US$755 million) in China for factory capacity to manufacture electric cars and the batteries that power them, part of an effort to help its Mercedes-Benz and Smart brands comply with the country’s green car production and sales quotas.

Hubertus Troska, head of Daimler’s greater China operations, told reporters that the investment was part of Daimler’s previously announced 10 billion euros (US$11.8 billion) global green car initiative.

China has set strict quotas for electric and plug-in hybrid cars that come into effect from 2019. It has an ambitious target of 2 million NEV sales by 2020 and has signaled longer-term it will phase out the sale of conventional petrol-engine cars.

This seismic shift towards NEVs has prompted a flurry of electric car deals and new launches as manufacturers worldwide race for a share of the world’s largest auto market.