OREANDA-NEWS. January 22, 2015. An electric and alternative fuel vehicle manufacturing base capable of producing 300,000 new energy cars per year is being planned for north China's Hebei Province.

With an investment of 3 billion yuan (490 million US dollars), the Hongxing new energy car base in Xingtai County will help shift Hebei's economy away from iron, steel, glass and cement production.

The first phase will see a production capacity of 150,000 new energy cars after introducing two mature car models from Core Power New Energy Automobile Co.,Ltd.

The company will invest 1.5 billion yuan in the first phase, said an official surnamed Cai with Core Power New Energy Automobile, based in southeastern coastal Fujian Province on Wednesday.

The company and the Xingtai county government signed a cooperation agreement in late December. The project aims for a production and sale of no less than 10,000 cars in the first year.

The second phase, which also costs 1.5 billion yuan, includes the development of new car models, the founding of an automobile research institute and construction of two car assembly lines.

The total production capacity of the project is 300,000 cars per year.

Core Power New Energy Automobile will also cooperate with Canada-based Magna company to build a new energy auto parts base in Xingtai, according to Cai.

Hebei Province is struggling in its economic restructuring as they slash excessive iron and steel, glass and cement capacity in a bid to tackle pollution, which also affects Beijing and Tianjin.

China will create a favorable environment to foster quicker growth in the new-energy vehicle sector through fiscal policy, said a Ministry of Finance official.

A new policy package which would support the growth of new energy automobiles is in the works , said the official.

China's production and sale of new energy cars both increased more than 300 percent to reach 78,000 and 74,000 in 2014, showed statistics released by the China Association of Automobile Manufacturers.