A Volkswagen joint venture in China has agreed to purchase green car credits from Tesla to meet local environmental rules, according to Reuters. The deal highlights the scale of the task Volkswagen faces in transforming its carmaking business into a leader in electric vehicles.
Volkswagen investors have warmed up to its plans to go electric sending its shares soaring this year
The German and world’s second-biggest automaker is still reliant on traditional combustion-engine vehicles.
Volkswagen’s joint venture with state-owned Chinese automaker FAW sold 2.16 million cars last year
It is unclear how many green credits FAW-Volkswagen will buy from Tesla, but a figure of around 3,000 Yuan per credit is reported.
The deal effectively sees Volkswagen, the biggest foreign carmaker in China, subsidizing a rival as it ramps up production of EVs.
Volkswagen ventures in China plan to roll out five electric ID series models this year.
Volkswagen stock is currently gaining. VOW3 is up 0.73%
