Although China has committed to some of the most ambitious policies for reducing energy consumption and begun incentivizing the commercial development of new energy vehicles and related infrastructure, it is clear that more aggressive and innovative approaches are needed for slowing down and eventually reversing the trend of rapidly rising oil consumption rates and worsening air pollution in many Chinese mega cities such as Beijing and Shenzhen.

This report is aimed at introducing the California ZEV-Credits Program, a recent innovative scheme for incentivizing sustainable vehicle production and financing clean transportation technologies development through the transportation sector. The Program’s success will be evaluated through a single case study of world’s leading California-based electric vehicle manufacturer, Tesla Motors. This report will end with initial suggestions for policy-makers and related stakeholders on how a similar program could be evaluated and tailored for use in China.