and have earned 1.66 million credits and 1.4 million credits in 2021, valued at about RMB 3.46 billion and RMB 2.93 billion, respectively.

(Image credit: BYD)

The dual credit policy is one of the key forces driving the electrification transition of automakers in China, and BYD (SHE: 002594, HKG: 1211, OTCMKTS: BYDDF) and Tesla (NASDAQ: TSLA), as the biggest players, are naturally the biggest beneficiaries.

In 2021, 129 passenger car companies in China generated a total of 6.79 million positive new energy vehicle (NEV) credits and 797,900 negative NEV credits, according to information released by China's Ministry of Industry and Information Technology (MIIT) on July 5.

BYD, Tesla, GAC, and JAC are the top contributors of positive credits, with BYD at 1.66 million credits, contributing 24 percent of the positive credits.

Tesla earned 1.4 million credits in 2021, contributing about 21 percent. GAC was 448,700 and JAC was 397,000 credits.

As background, as CnEVPost has previously mentioned, China's dual credit policy is one of the most important drivers for the rapid development of the NEV industry.

The dual credit is CAFC (Corporate Average Fuel Consumption) credit and NEV (NEV) credit.

The policy has been in effect since April 1, 2018, and car companies that fail to meet the fuel consumption control requirements can offset the negative credits from excessive fuel consumption through the NEV credits they generate, or by purchasing new energy credits from other companies.

If a car company is unable to get their negative credits to zero, then they need to submit a product adjustment plan to the MIIT and set a deadline for compliance.

Before their negative credits are zeroed out, products with substandard fuel consumption cannot be sold to the public.

The MIIT previously released information showing that the average transaction price of NEV credits in 2021 was RMB 2,088 ($312) per credit, which means that if BYD and Tesla sold all the credits they received last year, they would earn RMB 3.46 billion and RMB 2.93 billion, respectively.

(NYSE: NIO, HKG: 9866, SGX: Nio) is not in the latest table published by the MIIT, but given that its vehicles are produced in JAC's factory, the positive credits earned by JAC are mainly contributed by Nio.

JAC reported 2021 electric vehicle (EV) sales of 134,118 units, data monitored by CnEVPost show. Although the company did not specify, as is industry practice, the figure includes Nio's vehicles, which was 91,429 units in 2021, or about 68 percent of JAC's total EV sales.

Motors (NYSE: XPEV, HKG: 9868) received 360,928 credits in 2021, valued at about RMB 753 million.

(NASDAQ: LI, HKG: 2015) got 143,507 credits, valued at about RMB 299 million. Li Auto's Li ONE vehicles sold in 2021 are extended-range vehicles with about half the capacity of battery electric vehicles.

Hozon Auto, which owns the brand, received 208,491 credits in 2021, WM Motor 159,377 credits, Leapmotor 82,626 credits and SAIC-GM Wuling 59,589 credits.

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