In July 2023, the Chinese Government published a draft revision of the CAFC and NEV Credit Management Policy. The draft revision stipulates requirements for obtaining credits from 2024 onwards, with the main changes as follows.

1) The requirements for obtaining credits will be 40% stricter than the current proposal. This will require NEV manufacturers to produce higher quality NEV products rather than just obtaining credits.
2) In order to stabilise the supply and demand of credits, a new ‘credit pool’ system will be introduced, which will have the function of storing credits.

If an enterprise has more than 2.0 times more NEV positive credits than the sum of CAFC negative credits and NEV negative credits, it can voluntarily deposit them in the credit pool according to the deposit ratio stipulated by the Ministry of Industry and Credit. On the other hand, if there is a shortage of NEV credits (less than 1.5 times the sum of CAFC minus credits and NEV minus credits to be compensated), enterprises may withdraw the credits they have deposited according to the withdrawal ratio stipulated by the AIC; adjust for excess or deficiency in NEV credits; or withdraw the credits they have deposited into the credit pool according to the withdrawal ratio stipulated by the AIC, stabilise the transaction price, the ‘credit pool’ system will be introduced from August 2023.

3) Each company will be required to calculate and publish its carbon dioxide emissions.
In addition, although not stated in the revised proposal, according to the response document to the press conference released by the Ministry of Industry and Credit in conjunction with the announcement of the same, the NEV credit ratio in 2024 is stipulated to be 28% and 38% in 2025, significantly higher than the 18% in 2023, and even though the NEV purchase subsidy is to end, the NEV support The policy is to continue to support NEVs.