In addition to leading global electric vehicle (EV) sales, BYD is now eyeing a lucrative new business in Europe: selling carbon credits. According to Reuters, the Chinese automaker is in talks with European car manufacturers to form an alliance that would allow it to sell them carbon credits, helping them avoid hefty EU emission fines set to take effect in 2025.
Source: Jiemian News
In addition to leading global electric vehicle (EV) sales, BYD is now eyeing a lucrative new business in Europe: selling carbon credits. According to Reuters, the Chinese automaker is in talks with European car manufacturers to form an alliance that would allow it to sell them carbon credits, helping them avoid hefty EU emission fines set to take effect in 2025.
“We are in negotiations, and the talks are progressing well,” said Alfredo Altavilla, BYD’s special advisor on European affairs, at an automotive launch event in Italy. Research cited by The New York Times estimates that BYD and other Chinese companies could generate up to $1 billion (approximately 7.28 billion yuan) in profits from carbon credit sales.
European automakers are eager to partner with BYD because many are struggling to meet the EU’s increasingly stringent emissions targets and need to purchase surplus carbon credits from lower-emission manufacturers. On January 1, the EU’s new emission standards for passenger cars and light commercial vehicles officially took effect, part of a broader effort to reduce greenhouse gas emissions by at least 55% from 1990 levels by 2030 and achieve carbon neutrality by 2050.
BYD has been expanding its global footprint in recent years, establishing operations in Europe, North America, and Latin America. In 2024, the company’s overseas EV sales reached 417,200 units. A report by Morgan Stanley strategist Tim Hsiao and his team noted that BYD’s monthly deliveries in Europe surged from 3,000–4,000 units in the first half of 2024 to 6,000–7,000 units in October and November. More than 70% of BYD’s European sales were in EU member states.
With the EU tightening its carbon emission policies, demand for carbon credit trading is expected to rise among European automakers. For Chinese EV manufacturers, this presents a major new business opportunity.