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China's Changan steers toward electric future

State-owned automaker to pull traditional fossil-fuel cars from lineup by 2025

Chongqing Changan Automobile's new Shangri-La plan involves phasing out traditional combustion-engine cars and working with partners on technologies including safety.

BEIJING -- State-owned China Changan Automobile Industry (Group) will end sales of traditional gasoline and diesel vehicles under its brand in 2025, positioning itself to thrive under a potential government ban on combustion-engine cars.

The move is part of the Shangri-La plan for so-called new-energy vehicles -- mainly electric cars and plug-in hybrids -- announced by listed subsidiary Chongqing Changan Automobile in a news conference here Thursday. The automaker intends to invest 100 billion yuan ($15.1 billion) by 2025 in developing new-energy vehicles, employing 10,000 research and development staffers worldwide.

Changan aims to roll out 33 electric and plug-in hybrid models. The automaker also hopes to develop vehicles that can travel 100km with just five minutes of charging.

The plan additionally entails accelerating partnerships to develop safety and other technologies. Changan is teaming with companies inside and outside the auto industry, including German autoparts manufacturer Robert Bosch, Chinese electric-vehicle startup Nio, battery maker Contemporary Amperex Technology, ride-hailing company Didi Chuxing and domestic internet giants Baidu, Alibaba Group Holding and Tencent Holdings.

The Shangri-La effort does not cover joint ventures with the likes of Mazda Motor, Suzuki Motor and Ford Motor. Changan sold 1.35 million passenger vehicles under its own brand last year, making it the top-selling Chinese marque.

The company becomes the first Chinese automaker to state a clear time frame for discontinuing combustion-engine vehicles, according to local media.

China's government is pushing the auto industry to pivot to electric. Production and sales quotas for new-energy vehicles will be introduced in 2019, with plans to raise them thereafter. Beijing is considering a road map toward ending sales of fossil-fuel automobiles altogether, putting local automakers under pressure to fall in line.

Swedish automaker Volvo Cars, a subsidiary of China's Zhejiang Geely Holding Group, plans to drop vehicles powered solely by combustion engines from its lineup as of 2019, offering only electric vehicles and hybrids. China's FAW Group is considering going electric-only with its flagship Hongqi brand.

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