Global “climate” mandates are forcing Western automakers to literally bankroll Beijing’s Electric Vehicle giants. Thankfully, the scheme is finally under fire. Here’s what you need to know.
In the suburbs south of Sydney, Australia, communist China’s flagship automaker has been renting hectares of makeshift parking lots, including space at a theme park, to store cars nobody has bought yet.
Why would BYD import thousands more vehicles than it can sell?
According to the Australian Financial Review, it lets the company stockpile “lucrative carbon credits” under Australia’s new vehicle emissions rules. BYD imported nearly 51,000 cars in the year to September 2025 but sold just shy of 38,000, the paper reported.
By February, BYD sat atop Australia’s carbon-credit table with more than 6.2 million credits. Pro-climate trade outlet CarbonCredits.com estimated that haul could be worth around $217 million in compliance value.
That is the “climate” agenda in a nutshell. Governments invent a scarcity, fine the companies building the cars people actually want, and let the communist regime’s champions sell them permission to keep operating.
An Engineered Market
These are not “voluntary” offsets. They are compliance credits, created entirely by government decree. Under fleet-average emissions rules, a company selling only electric or plug-in vehicles generates surplus credits on paper. Companies that sell gasoline cars must buy those credits or pay penalties.
In Europe, the scheme has been formalized through “pooling.” Ahead of the European Union’s 2025 targets, the European car industry’s trade group warned of potential fines of up to 15 billion euros in a worst-case scenario.
Desperate automakers lined up for partners. Stellantis, Toyota, Ford, Mazda, and Subaru pooled with Tesla, Reuters reported. Mercedes-Benz teamed up with Volvo and Polestar, both owned by China’s Geely.
In October 2025, Nissan announced it had “formed a pool with BYD for its CO2 fleet emissions in Europe,” The Guardian reported. A Nissan spokesman explained that BYD was chosen “due to the availability of credits.”
The Financial Times warned that European carmakers led by Volkswagen “could be forced to pay hundreds of millions of euros to Chinese electric-vehicle rivals.” Brussels built a system that forces Europe’s industry to subsidize its own destroyers.
Beijing’s own “dual-credit” policy works the same way. BYD earned 1.66 million credits in 2021 alone, worth about 3.46 billion yuan at the average trading price, according to CnEVPost, citing Chinese regulatory data.
To be clear, BYD is not merely a credit factory. The company reported revenue of roughly 804 billion yuan in 2025, according to its annual report, and CNBC reported that it overtook Tesla as the world’s top seller of battery-electric cars that year.
But the credits are pure gravy on top of massive state support. The Center for Strategic and International Studies estimated Beijing poured at least $230.9 billion into its electric-vehicle industry from 2009 to 2023.
Tesla Proves the Point
This isn’t just a Chinese racket. Tesla has been its biggest American beneficiary. According to the company’s annual report, Tesla booked $1.79 billion in “automotive regulatory credits” in 2023, $2.76 billion in 2024, and nearly $2 billion in 2025. Tesla itself says these sales carry “negligible incremental costs.”
Then Washington stopped forcing anyone to buy. The One Big Beautiful Bill Act, signed in July 2025, set the civil penalty for violating federal fuel-economy standards to zero. Tesla’s credit revenue collapsed to $146 million in the second quarter of 2026, down from $439 million a year earlier, according to its quarterly filing.
Remove the government coercion, and the “market” evaporates. It was never a market. It was always a mechanism to transfer wealth—in this case from Western consumers to the Chinese Communist Party (CCP).
America Fights Back
The Trump administration is dismantling this machinery at home. On Sept. 28, the Department of Transportation finalized its “Freedom Means Affordable Cars” reset of the Corporate Average Fuel Economy (CAFE) program. The Biden administration had set a path toward about 50.4 miles per gallon by model year 2031, as noted by Roll Call. The new standards project roughly 34.9 mpg.
More importantly, the final rule excludes electric vehicles (EVs) from the standard-setting calculations and ends credit trading between manufacturers starting with model year 2028. Regulators admitted the trading system had “resulted in a windfall for EV-exclusive manufacturers that sell credits to other non-EV manufacturers.” The rule takes effect Nov. 30.
BYD is not technically “banned” in the United States, but it is effectively locked out. A 100 percent Section 301 tariff on Chinese EVs took effect in September 2024.
Under the Commerce Department’s connected-vehicle rule, finalized in January 2025, manufacturers with a “sufficient nexus” to the CCP regime are barred from selling new internet-connected cars in the United States starting with model year 2027, even if they are built on U.S. soil.
The Department of Commerce warned that adversary access could allow Beijing “to extract sensitive data, including personal information about vehicle drivers or owners, and remotely manipulate vehicles.” In June, regulators denied Geely-controlled Polestar authorization to sell new vehicles in America under the rule.
Those defenses must hold. In January, President Donald Trump told the Detroit Economic Club he was open to Chinese automakers building U.S. plants, saying “Let China come in,” so long as they hire Americans. U.S. senators have since urged him to bar that door. They are right.
The Canadian Back Door
The bigger danger lies to the north. In January, Canadian Prime Minister Mark Carney’s government agreed to let in 49,000 Chinese EVs a year at a 6.1 percent tariff, replacing a 100 percent surtax.
Half the quota is set to be reserved for cheap models priced at CA$35,000 or less by 2030. Ottawa openly hopes the deal will “catalyse considerable new Chinese joint-venture investment in Canada.”
BYD has been preparing dealerships. In August, the mayor of Brampton, Ontario, said BYD had inquired about the idled Stellantis plant there to build buses, according to Bloomberg, though his office later said BYD had “no immediate interest.”
With the U.S.–Canada trade relationship under review, Washington must ensure Canada never becomes a tariff-free launchpad for CCP-made vehicles.
Europe’s Warning
Europeans are already living the consequences. Volkswagen agreed to cut more than 35,000 German jobs by 2030. Last December, it ended vehicle production in Dresden, the first closure of a German VW plant in the company’s 88-year history.
Germany’s auto industry association, the VDA, reported in May that about 100,000 auto jobs have vanished since 2019, and another 125,000 could follow by 2035. The VDA blamed expensive energy, excessive bureaucracy, and Brussels’ CO2 fleet rules, which alone jeopardize 50,000 jobs.
Falling exports to China and the United States also played a role. But much of the wound is self-inflicted.
Meanwhile, China’s industry is drowning in overcapacity. Amid a brutal price war, BYD slashed its cheapest Seagull model to 55,800 yuan (about $7,765) at home. Reuters exposed how brand-new Chinese cars were being registered and exported abroad as “zero-mileage used” vehicles to dump unsold inventory.
The Bottom Line
As Trump famously warned in 2012, global warming was “created by and for the Chinese in order to make U.S. manufacturing non-competitive.” Whatever the intent, that is precisely the outcome, as this writer has explained in the pages of The Epoch Times for years.
Western governments made emitting carbon dioxide—the gas of life—into a sin, then sold the pardons. The buyers have included Stellantis, Ford, and Nissan.
The sellers increasingly include the state-backed industrial giants of a ruthless communist dictatorship that steals technology, persecutes dissidents, threatens free people everywhere and especially in Taiwan, and builds the very connected cars Washington has flagged as tools for surveillance and sabotage.
Americans have started dismantling the racket. Other Western powers should follow. Kill the fleet mandates, end the credit schemes, and keep CCP-connected cars off Western roads. Our jobs, our freedom, and our sovereignty depend on it.
Originally published at The Epoch Times.
Article posted with permission from Alex Newman
