Dual credit policy

As well as the subsidies, in April 2018, the Chinese government implemented measures for the parallel administration of average fuel consumption and new energy vehicle (NEV) credits for passenger vehicle enterprises. This was known as the dual credit policy.

In China, passenger vehicles account for 82% of total vehicles registered. To reduce the impact of vehicle emissions on the environment and their impact on energy security, the administration limited internal combustion engine (ICE) passenger vehicle sales for each vehicle manufacturer and importer.

Dual credit indicates the corporate average fuel consumption (CAFC) credit and the NEV credit. Vehicle manufacturers and importers can sell, trade or transfer their credits. Enterprises with negative credits for one year wi