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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With 615 horsepower, the Cadillac Lyriq-V is the quickest Caddie to date. Cadillac’s first V-Series EV will outsprint a CT5-V Blackwing, and it can be yours for under $80,000.
The 2026 Lyriq-V EV is the fastest Cadillac ever
We knew it was coming soon. Cadillac teased the Lyriq-V for the first time in late October, giving a sneak peek at its first electric V-Series vehicle.
Cadillac’s performance brand is known for iconic sports cars like the CT5-V Blackwing, but the new EV pushes the “V-Series sub-brand to new heights,” boasted John Roth, vice president of Global Cadillac.
As the first EV to wear the V-Series badge, Cadillac promised the Lyriq-V would be powerful, but we didn’t know it would be this fast.
Cadillac officially introduced the 2026 Lyriq-V on Thursday, revealing additional specs, prices, and more. With an estimated 615 hp and 650 lb-ft of torque and a standard dual motor AWD powertrain, the EV is expected to accelerate from 0 to 60 mph in just 3.3 seconds, making it the quickest Cadillac to date.
At that speed, it would outrun the Cadillac CT5-V Blackwing with a 0 to 60 mph sprint time in 3.4 seconds. Although the CT-5 packs slightly more horsepower (668 hp), the Lyriq-V’s EV powertrain unlocks more powerful, instant acceleration.
The added power is enabled by an added Velocity Max feature, which “unleashes the vehicle’s full performance capability” with a surge of power and acceleration.
Interior and exterior design, prices, and features
The V-Series model differs from the traditional Lyriq with a lower center of gravity and custom front and rear bumpers. It also features V-Series badging on the rear doors and tailgate, V-pattern mesh on the lower grille, and 22″ wheels with the logo etched into the side.
Inside, the performance EV borrows features from the Lyriq, such as a panoramic fixed glass roof, a 23-speaker AKG sound system, and a massive 33″ LED display screen.
Cadillac distinguishes the V-Series from the traditional Lyriq by adding the V-Series logo, a V-mode button, and a sports rim with hand grips. Other unique features include a custom infotainment experience with a “V-Series persona,” a signature V-Series illuminated sill plate and V-pattern detailing on the seatbacks.
A 102 kWh battery pack is expected to provide a range of up to 285 miles. The 2026 Cadillac Lyriq-V starts at $79,990, including the destination fee.
In comparison, the Tesla Model Y Performance starts at $51,490 and has an EPA-estimated range of up to 277 miles. It also includes AWD and can accelerate from 0 to 60 mph in 3.5 seconds.
Cadillac’s new performance EV will be sold in the US, Canada, Australia, and New Zealand. Other markets will be announced closer to launch. GM will begin producing the new Lyriq-V at its Spring Hill, TN, manufacturing plant in early 2025.
What do you think of the Cadillac’s new performance EV? Would you buy one for $80,000? Or are you sticking with the Model Y Performance? Drop us a comment below to let us know.
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Tesla has announced some important price hikes across its entire lineup in Canada amid incentives going away and a struggling Canadian dollar.
The Canadian EV market is already having problems amid announcements that the federal incentive program will be eliminated. The same thing is happening to Quebec’s own program, which was the most generous in the country—making the province the leader in EV adoption in Canada.
Now, Tesla, which sells more EVs than anyone in Canada, announced that it is increasing prices on all its lineup.
Here are the price increases for each Tesla model:
- Model 3:
- Long Range RWD: $4,000
- Long Range AWD: $8,000
- Performance: $9,000
- Model Y: $4,000
- Model S: $4,000
- Model X: $4,000
Buyers can still get $1,300 CAD off of new Model Y, Model S, or Model X purchases with a referral code.
Tesla never comments on price changes and therefore, we don’t know the official reasons for these specific price increases, but we can make some educated guesses.
First off, the Canadian dollar has crashed in comparison to USD over the last few months:
Furthermore, the timing of announcing that the price increases will take place on February 1st has led some to link this to the upcoming tariff wars that President Trump signaled against Canada.
The US President said that he plans to impose 25% tariffs on any goods coming from Canada, and Canada said that it would retaliate.
Electrek’s Take
Obviously, this is not good for the EV market in Canada.
The removal of incentives is already hurting the market, and now the base price of the most popular EVs in the country, Tesla vehicles, is also going up before incentives.
This will be a bad year for EVs in Canada.
Hopefully, things will settle down and we will get more clarity once the tariff war actually starts.
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