Volkswagen has agreed to buy green car credits from Tesla to help comply with China’s environmental rules, Reuters reported.
- The acquisition will be made through Volkswagen’s joint venture with state-owned Chinese automaker FAW or FAW-Volkswagen to help meet increasingly tough targets.
- Details of the deal have yet to be announced, but FAW-Volkswagen’s offer was around 3,000 yuan per credit. This is higher than prices in previous years.
- The deal sees Volkswagen subsiding a rival while it boosts production of electric vehicles. Its Chinese ventures plan to roll out five electric ID series models in 2021.
- Volkswagen did not comment on the matter. It said it was “strategically targeting to be self-compliant” with Chinese rules, and would buy credits if required.
- Manufacturers are awarded green credits that can offset negative credits for producing more polluting vehicles. Such credits can also be bought to comply with overall targets, but trade is often between affiliated companies that share a major shareholder.
- FAW-Volkswagen sold 2.16 million cars in 2020. Its gasoline sedans and SUVs have so far proved far more popular in China than electric vehicles.