In October 2021, the Innovation Center for Energy and Transportation released this annual report evaluating how the Corporate Average Fuel Consumption (CAFC) and New Energy Vehicle (NEV) Credits policy works in terms of pushing automakers in China toward much lower carbon emissions. The report was compiled with support from Energy Foundation China.

The two core targets of China’s CAFC-NEV credits policy are to facilitate the healthy development of new energy vehicles—which consist of battery electric vehicles, PHEVs, and fuel cell vehicles—in China and to cut fuel consumption and carbon emissions of traditional vehicles. Based on fuel economy data and NEV credit statistics, the report quantitatively analyzes how many automakers have attained requirements by the CAFC-NEV credits policy and what challenges are slowing its implementation. The report also puts forward policy recommendations for driving more reductions in fuel economy of traditional vehicles and increasing the penetration rate of NEVs, based on its evaluation of policy implementation earlier and the changing dynamics in China’s passenger car market.