China Launches Bold New Electric Vehicle Credit Scheme

This week the electric vehicle world is abuzz with the news of a new million-mile battery in the works, but another, much less flashy innovation announced this week could have even more sweeping implications for the EV sector. It may not make the sexiest headlines, but a new form of EV credit-trading being tested out in Beijing could revolutionize the way electric vehicle markets function.

“Tesla made about $354 million in Q1 2020 by selling regulatory credits,” Electrek reported this week. “Fiat Chrysler and General Motors, among others, buy billions of dollars in CO2 credits a year to avoid paying fines.” Despite the fact that the Trump administration is in the process of rescinding fuel economy rules that include greenhouse gas credits, Tesla has seen plenty of demand for their credits at the federal level. Even without these greenhouse gas credit sales, “Tesla has made over $2 billion from the sale of environmental credits over the years, but those have mostly consisted of ZEV credits from CARB states – mainly California,” Electrek reported in a separate article last June.

China has clearly been paying a lot of attention to what’s happening with high demand for environmental EV credits in Western markets, and this week the Beijing Environmental Exchange launched “a similar credit system to get individuals to drive an electric car, or avoid driving altogether.” As Electrek explains, “carbon emissions allowances are usually traded by companies. But the Beijing exchange’s mobile app allows individual car owners to create an account and accumulate credits.”

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Xinhua Net, China’s state-run news source, reported this week that this “new carbon-neutral solution provides a market-based incentive to encourage car owners to reduce their driving frequency and allows enterprises to buy emission quotas saved by car owners.” The article also referenced an interview with…

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