Photo: Tesla Greater China
Tesla is one of the biggest winners under China's 'dual credit' policy. Last year, the manufacturer earned 1.4 million credits worth 2.93 billion yuan.
Tesla is among those who have earned the most credit under the 'dual credit' policy in China in 2021, according to CnEVPost. The dual credit policy is one of the key drivers behind automakers' transition to electrification in China. Tesla is one of the biggest players, and therefore one of the biggest beneficiaries, according to data recently released by China’s Ministry of Industry and Information Technology (MIIT).
According to data from July 5, in 2021, 129 passenger car companies in China generated a total of 6.79 million positive new energy vehicle (NEV) credits and 797,900 negative NEV credits. BYD, Tesla, GAC and JAC are the main providers of positive credits.
BYD leads with 1.66 million credits, contributing 24% of the positive credits. Closely behind is Tesla, which earned 1.4 million credits in 2021, contributing about 21%. Far behind, in third place are GAC with 448,700 and JAC with 397,000 credits.
China's dual credit policy is one of the most important drivers for the rapid development of the NEV industry. The dual credit is the CAFC (Corporate Average Fuel Consumption) credit and the NEV credit. This policy came into effect on April 1, 2018. CnEVPost explains that car companies that do not comply with fuel consumption controls can offset negative credits from excessive fuel consumption through the NEV credits they generate or by purchasing new energy credits from other companies such as Tesla. If an auto company cannot bring its negative credits to zero, it needs to submit a product adjustment plan to MIIT and set a deadline for meeting it. Until their negative credits are reset to zero, products with low-quality fuel consumption cannot be sold to the public.
The average transaction price for NEV loans in 2021 was 2,088 yuan ($312) per credit, meaning that if BYD and Tesla sold all the credits they received last year, they would earn 3.46 billion yuan and 2.93 billion yuan respectively.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.