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January, 23rd 2022

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DEC 03
07:26

Hubei issues China's first credit point loan to NEV producer

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Hubei Xinghui New Energy Intelligent Automobile (Xinghui New Energy) has received a green car loan which amounts to CNY 10 million ($1.57m), making it the first new energy vehicle (NEV) credit income right pledge loan in China, Kallanish reports.

According to the current method, positive points are generated if a passenger car company’s average fuel consumption is lower than the standard, and negative points are generated if a passenger car company’s average fuel consumption is higher than the standard.

For the production of a pure electric vehicle, as long as the cruising range reaches the specified limit, the car maker gets 3.2 points, and if the power consumption per 100 kilometres meets certain conditions, the points received will be multiplied by 1.2.

Under the "dual credit points" policy, companies must achieve a total positive point score to be qualified for operation. For companies not meeting the standards, the declarations of high fuel consumption products and the product production will be suspended.

Xinghui New Energy is the second largest NEV production base of WM Auto Group in China, and it also undertakes key development duties of Hubei Province.

This October, the Wuhan branch of the People’s Bank of China and the Hubei branch of the Agricultural Bank of China jointly evaluated Xinghui New Energy. They learned that the company currently has 40,000 positive credit points. It is predicted that the company will receive 40,000, 120,000, and 200,000 credit points each year in the next three years.

The banks designed a special loan layout for it according to the current dual credit points policy. In the end, CNY 50m of credit was pledged with positive points for NEVs, and the first one-year loan of CNY 10m was issued with an interest rate of 3.85%. The points were registered and pledged in the unified personal property financing registration and publicity system of the People's Bank of China Credit Information Center.

The current dual credit points policy has been carried out since 2017, and the adjustments are expected to be effective starting from 1 January, 2022.

Companies are allowed to trade credit points. For most traditional car makers, buying them from NEV makers, who tend to have more extra positive credit points, is becoming a necessity. Driving by the demand, the price of each credit point has reached CNY 3,000 on the market.

Kallanish Asia