China's Secret Weapon in the Electric Car Race
Local automakers are hoarding the country’s “new-energy vehicle” credits, giving them leverage when renegotiating joint ventures with western rivals.
Who gets all the credits?
Photographer: Qilai Shen/Bloomberg
Chinese carmakers may have found the secret to survival. Their foreign rivals should beware.
As manufacturers rush to meet the requirements of China’s policy to promote electric cars (known in the country as “new-energy vehicles”), locally-owned automakers have been busily accumulating special credits, which are awarded for how many electric cars they make and for cutting fuel consumption in their combustion engine vehicles. As a big carmaker, you need a certain number of these green credits to comply with China’s regulations.1 At least 10 new-energy vehicle credits are required for every 100 combustion engine cars made, or thereabouts.