The Chinese government has announced new regulations on the sale of new energy vehicles in the country.

Under new regulations announced by the ministry of industry and information technology, at least 10% of new vehicle sales in 2019 will have to be new energy vehicles, including electric and hybrid vehicles, rising to 12% by 2020.

A previously announced quota of 8% for 2018 has been cancelled to give companies more time to prepare.

With just over 28m passenger vehicles sold in the country last year, this new minimum is higher than previously announced.

The new regulations apply to companies that sell more than 30,000 conventional internal combustion engine vehicles annually, including locally made and imported vehicles. 

It is unclear whether this applies to the commercial vehicle segment but passenger vehicle sales alone amounted to almost 24m units last year.

Companies that fail to meet these targets will have to buy quotas from other automakers or face financial penalties.

The ministry is looking to phase out fossil fuel powered vehicles in the long term although no specific timetable has been released.

China urgently needs to cut pollution levels in its main cities but it also has ambitions to become the global leader in the electric vehicle industry.