BYD’s Carbon Credit Strategy: A Sign of Shifting Automotive Power

Friday, February 14, 2025

Lately, I’ve found myself binge-watching short video clips and still thinking about them long after I’ve stopped watching. A friend once told me, “It’s so easy to lose an hour on short videos.” While she lamented the wasted time, I see it from another perspective: You are what you eat. You think what you see. The indulgence in low-quality information leaves a lasting imprint on our minds.

Just as the food we consume shapes our physical health, the information we absorb influences our thoughts and perspectives. If you spend hours on mindless short videos, your brain continues to process them even after you’ve turned off the screen. The effect is immersive—these videos don’t just vanish; they linger, subtly shaping how you perceive the world.

I can't think of a better Chinese saying than this one, 近朱者赤,近墨者黑 (Jìn zhū zhě chì, jìn mò zhě hēi), meaning, One who nears vermilion becomes red; one who nears ink becomes black," suggesting our environment and influences shape who we are—just as the food we eat nourishes the body, the information we consume nourishes the mind.

For those seeking self-improvement, being selective about the information we consume is crucial. In today’s digital landscape, what is truly valuable is often not popular, and what is popular is rarely valuable. Likewise, what is new is not always important, and what is important is often not new.

On a different note,  China’s BYD is in advanced talks to form a carbon credit pool in Europe, according to Reuters. A carbon credit is a permit allowing companies to emit a certain amount of greenhouse gases. Firms that produce fewer emissions than their cap can sell excess credits to those exceeding their limits, creating a market-based system to curb pollution.

BYD’s move highlights several key trends in the global EV market and Europe’s evolving regulatory landscape:

1. BYD’s Growing Influence in the Global EV Market   BYD’s ability to supply carbon credits underscores its leadership in the EV sector. Unlike legacy European automakers still struggling with electrification, BYD’s high sales volumes allow it to generate surplus credits—turning regulatory pressure into a business opportunity.

2. A Strategic Entry into the European Market   Rather than simply selling EVs, BYD is embedding itself deeper into Europe’s automotive ecosystem. By forming carbon credit pools with European manufacturers, it strengthens business ties with competitors, potentially paving the way for future collaborations or supply chain integration.

3. Regulatory Loopholes and the Cost of Compliance   The EU’s carbon credit system is designed to accelerate electrification, yet it also allows traditional automakers to delay their EV transition by purchasing credits instead of fully committing to change. While this helps legacy companies stay financially stable, it raises concerns about whether the policy is genuinely driving progress or just postponing it.

4. China’s Growing Dominance in EV Technology   This development reinforces how Chinese EV makers—especially BYD—are not just catching up but actively reshaping the industry. While European automakers rely on regulatory workarounds, Chinese firms are already operating ahead of emissions targets, signaling a faster-than-expected shift in global automotive power.

Ultimately, BYD’s approach mirrors Tesla’s early strategy of selling credits to traditional automakers, but with an added strategic twist—strengthening its foothold in Europe while profiting from its EV dominance. European manufacturers now face a choice: accelerate electrification or keep paying their Chinese competitors for compliance.

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11 responses
Yanwen Xia upvoted this post.
“ You are what you eat. You think what you see. The indulgence in low-quality information leaves a lasting imprint on our minds.” Yes
BYD can make money by selling both e-cars and carbon credits
From a friend, 赞同你的观点!使用social media 要有节制和分析能力,不然很容易成为addiction 或被误导。
7 visitors upvoted this post.