A pure EV car in China is worth 5 credits. Tesla 2020 EV sales were worth about $300M/yr in credits. VW will buy credits from Tesla. Tesla will be selling 400k-500K cars in China in 2021. Those worth will be worth about $1B in credits for 2021. Tesla is earning from Europe and China EV penalty and credit systems.
Tesla production levels are increasing around the world and especially in Europe and China.
The New Energy Vehicle mandate policy applies only to passenger cars and took effect April 1, 2018. China revised its new energy vehicle (NEV) credit score program for 2021-23 to form a long-term mechanism to develop the industry. The proportion of NEV production and sales is targeted at reaching 20pc of total auto production by 2024, according to MIIT. The new programme will raise the NEV credit to 14pc in 2021, 16pc in 2022 and 18pc in 2023, from 10pc in 2019 and 12pc in 2020.
The formulas are also updated in the new 2020 plan. The coefficient of all-electric vehicles' driving range will be reduced from 0.012 to 0.0056, while the points for plug-in hybrid vehicles will be cut to 1.6 from 2. Fuel-cell vehicles' points will be 0.08 times of energy efficiency, down from 0.16.
The credit points are allowed to be carried forward and traded when auto manufacturers fail to meet production targets. The points in 2019 can be carried forward in equal amounts for one year, while the points in 2020 can only be carried over by 50pc each time. It aims to enhance the trading value of credit points and to encourage trading among new energy manufacturers.