FRANKFURT, Aug 29 (Reuters) - China will present its final plans for electric and hybrid car quotas in the coming days, German newspaper Frankfurter Allgemeine Zeitung (FAZ) reported, adding that penalties for non-compliance are due to be softened.

Earlier this year, China said electric and plug-in hybrid cars should make up at least a fifth of Chinese auto sales by 2025, with a staggered system of quotas beginning in 2018.

The rules envisaged harsh penalties for non-compliance, including the cancellation of licences to sell non-electric cars in China, the world’s largest car market.

FAZ, without citing sources, said the enforcement of the quotas would be handled with a system of credits which would allow for some flexibility in 2018, a solution which will be “satisfactory” for the German carmakers.

In June, Chinese Premier Li Keqiang and German Chancellor Angela Merkel had agreed that concessions would be made, but the ministry later released draft regulations upholding the strict sales quotas. (Reporting by Edward Taylor. Editing by Jane Merriman)