China revises EV credits for automakers, reducing offset opportunities that have driven production
China’s Ministry of Industry and Information Technology announced a revision to its long-running “dual-credit policy,” in which local automakers earn certain calculated credits for each EV they build. The Ministry is reducing said credit by 40%, putting certain automakers in jeopardy of non-compliance and risk of losing their ability to sell to the public.
In many ways, China continues to lead the global transition toward all-electric vehicles – but steadfast adoption overseas is not necessarily due to respect for Mother Earth. Government and tax credits have incentivized automakers and consumers in China alike to get to this point, and have adjusted policy as seen fit while adoption continues to snowball.
As of 2022, one in four vehicles sold in China was electrified, but this successful adoption rate dates back to significant subsidies for New Energy Vehicles (NEVs) that began in 2014. In China, NEV’s are defined as battery electric vehicles (BEVs), plug-in hybrid (PHEVs), or hydrogen fuel cell vehicles.
The Chinese government ended that program last year, which led EV automakers like Tesla to slash prices to maintain its market share, igniting a price war that is just cooling off six months later. As a result of less tax credits available and a “wait and see” mentality growing among consumers in China watching EV automakers try to out-discount one another, sales began to dwindle and the market grew weary.
The re-stimulate growth in the EV segment, China’s Ministry of Finance introduced a new tax credit that will offer consumers another $72 billion in exemptions through 2027. On the OEM side, the Chinese government has been offering local automakers their own credit program – one many have used to offset carbon emissions to stay in the good graces of the state. However, those credits just got cut, putting some current production operations in jeopardy.
EV credits for automakers slashed in China
China’s Ministry of Industry and Information Technology (MIIT) shared details of its latest update to its tax credit policy for automakers earlier today, which reduces credits given for production of standard model NEVs by about 40% on average. Here’s how it will break down:
- BEV passenger cars, the credit formula for standard models is calculated as 0.0034 x R + 0.2
- “R” = range in km
- For plug-in hybrids, a standard model’s credit is now 1
- The upper limit of the standard model credit for pure BEVs vehicles is 2.3
The current credit formula for BEVs is 0.0056 x R + 0.4, while standard model PHEV credits currently sit at 1.6. For further insight, a 600 km EV in China would earn its makers 3.76 credits today, but under the incoming reductions, the same vehicle only garners 2.24 credits – a significant reduction.
Especially when you take into account how OEMs in China are using these credits. Fuel consumption control requirements can put certain automakers still building combustion models in a whole of negative credits with the government, but NEV credits can be used as offsets.
Less available credits per EV built could temporarily (or permanently) put these same automakers into a bind of compliance, since any OEM that cannot get its negative credits back to at least zero must submit a product adjustment plan to the MIIT and set a deadline for once again becoming compliant. Until then, those substandard products cannot be sold to the public in China.
Additionally, today’s policy updates adds a credit pool management system, in which OEMs that are beyond compliant can store their excess credits in the pool, valid for five years. Should that automaker find itself back in the negative, it can withdraw it stored credits.
The MIIT says its new reduction to EV credits will kick in in China on August 1.
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Tesla is going to build a new Megafactory in Texas near Houston, according to a tax abatement agreement with Waller County.
At the time of writing, Tesla had yet to comment on the new project, but the Waller County Commissioners Court confirmed the project on Wednesday when they approved a tax abatement deal with the company:
Under the proposed agreement, Tesla will receive tax abatements from Waller County based on property improvements. The deal includes $44 million in facility improvements and $150 million in Tesla manufacturing equipment that Tesla will install. The next phase involves a new $31 million distribution facility with about $2 million in Tesla distribution equipment and building upgrades.
Tesla is going to take over a 1-million-sq-ft building that it already held the lease on at the Empire West industrial park near Katy, Texas – just outside of Houston.
Logistics company DB Schenker occupied the space where it handled parts for Tesla, but it will move out and Tesla plans to build Megapack production lines at the site:
Tesla will operate a new Megapack battery storage manufacturing facility at a 1 million-square-foot building, which was initially constructed with no tenant on speculation that it would attract jobs and economic development.
Tesla has previously referred to plants producing Megapacks as “Megafactory”. The company already operates one in Lathrop, California, and one in Shanghai, China, where it just started production.
Those factories are set up for a production capacity of 40 GWh worth of Megapacks per year.
It’s not clear if Tesla plans for a similar capacity at this new factory, but the county announced project should result in creating 1,500 jobs.
In addition to the existing building, the project will include the construction of an additional “600,000-square-foot distribution facility with some manufacturing capabilities.”
Unlike its automotive business, Tesla’s energy business has been growing at an impressive pace – although prices and margins have come down last year.
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![Is Genesis taking notes from Porsche? New GV60 Magma caught with the Taycan [Video]](https://i0.wp.com/electrek.co/wp-content/uploads/sites/3/2025/03/Genesis-GV60-Magma-Porsche-2.jpeg?resize=1200,628&quality=82&strip=all&ssl=1)
Genesis is gearing up to unleash its alter ego with its upcoming Magma lineup, its debut into the world of high-performance luxury vehicles. First up is the Genesis GV60 Magma, due out later this year. As testing wraps up, the GV60 Magma was spotted alongside none other than the Porsche Taycan.
The first dedicated Genesis EV model, the GV60, will kick off another new chapter for the Korean luxury automaker.
Genesis unveiled the GV60 Magma last March, claiming it will kick off “the brand’s expansion into the realm of high-performance vehicles.” The performance EV includes an improved battery, chassis, and motor for added performance.
The Magma model boasts a wider, lower stance for more control. Other key upgrades include a wider front air intake to help cool the batteries, motor, and brakes. It also includes air curtains to maximize efficiency and an added roof fin channels air to the rear wing, generating downward force.
Genesis upgraded the interior to match the GV60 Magma’s luxurious, sporty design. It includes unique sports car-like bucket seats with exclusive “double-diamond stitching” in the Magma orange and titanium coloring.
Genesis GV60 Magma spotted with the Porsche Taycan
With its official debut coming up, the sporty Genesis GV60 Magma was spotted testing alongside a Porsche Taycan and Hyundai’s IONIQ 5 and IONIQ 6 N models.
Despite the camouflage, the video from CarSpyMedia reveals a few new design elements, like the two-line headlight featured on the updated GV60 model.
Genesis will launch the GV60 Magma later this year in its home market, followed by the US, Europe, and others. Production is scheduled to start in the third quarter of 2025.
Will the Genesis GV60 Magma keep up with the Porsche Taycan or Tesla Model S Plaid? Priced and specs will be revealed closer to launch, but it will sit above the Performance AWD trim, which starts at $69,900 in the US. With up to 429 horsepower and 516 lb-ft of torque, it can hit 0 to 60 mph in 3.7 seconds.
| Horsepower | 0 to 60 mph (seconds) |
Starting Price | |
| Genesis GV60 Performance | 429 | 3.7 | $69,900 |
| Genesis GV60 Magma | ? | ? | ? |
| Porsche Taycan | 402 | 4.5 | $99,400 |
| Porsche Taycan Turbo GT (with Weissach Package) |
1,092 | 2.1 | $230,000 |
| Tesla Model S Plaid | 1,020 | 1.99 | $89,990 |
In comparison, the Porsche Taycan starts at $99,400 with up to 402 hp and a 0 to 60 mph time in 4.5 seconds. The Taycan Turbo GT, equipped with its Weissach package, packs 1,092 hp for a 0 to 60 mph sprint in just 2.1 seconds, but it costs $230,000.
Tesla’s Model S Plaid starts at $79,990 and can accelerate from 0 to 60 mph in 3.1 seconds with 1,020 horsepower. Which performance EV are you choosing?
Source: CarSpyMedia
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