XPeng's carbon-credit deals, worth over RMB1bn, point to Europe

What XPeng has said

The Chinese business daily Yicai reported on 29 September that XPeng had agreed carbon-credit sales with Porsche and several other international carmakers, covering the EU, the UK and Australia, with total expected revenue above RMB1 billion. Securities Times reported the same that afternoon, adding that more than RMB500 million of it is expected this year.

An XPeng vice-president confirmed the reports on his Weibo account. According to the outlets that quoted the post, he said several international carmakers had come to XPeng besides Porsche, and called the money high-margin income. Asked by Securities Times, a vice-president answered in one word: “true”. XPeng has made no announcement, named no other buyer and given no prices.

How a carbon credit works

Europe, the UK and Australia each set carmakers a target for cleaner new cars and charge those that miss it. In the EU and Australia the target is a limit on the average emissions of the cars a maker sells; in the UK it is a minimum share of zero-emission cars. A maker that beats its target can sell the margin to one that misses it — usually cheaper for the buyer than the penalty.

So far every car XPeng has registered in these markets has been fully electric, so each one has added to what it can sell. That will change a little: the L03, launched in Europe in July with first deliveries due in the fourth quarter, also comes as a range-extender in some European markets — an electric car with a small petrol engine that recharges its battery — and XPeng plans more such models abroad in 2027.

In XPeng's accounts the money appears under services and others — the same line as its engineering work for Volkswagen and its sales of parts.

Porsche is the largest piece on the record

In August Porsche left the Volkswagen group's emissions arrangement and formed a joint one with XPeng for 2026 and 2027. In such a pool the members' cars are counted together against one combined limit, so XPeng's electric cars pull down the average of Porsche's petrol models. The EU charges €95 per car for every gram of CO₂ per kilometre over the limit.

The pool is on the European Commission's list, as cited by the research group ICCT, which still shows only the two members. Porsche told Handelsblatt that the pool gives it flexibility in its move to electric cars. Neither company has disclosed a price.

XPeng brings real volume to it. It registered about 17,800 cars in the first half of 2026 in the European countries XPulse tracks where the EU rules apply (registrations), and in August 76% of the cars registered in the pool were fully electric, the highest share of the pools ICCT follows.

The UK and Australia hold far less

What XPeng has built up in the other two markets can be read from their own public records. Even valued at what a maker that falls short would otherwise have to pay, the credits visible there come nowhere near RMB500 million.

Benchmarks, not prices: what a maker that falls short pays for each missing allowance in the UK, and the penalty-notice rate for each missing unit in Australia. Actual prices are agreed privately and are likely lower. Converted at the Federal Reserve's rates of 25 September 2026 (£1 = RMB8.89, A$1 = RMB4.72). From the Department for Transport and the New Vehicle Efficiency Standard Regulator.

In the UK, a maker registering fewer than 1,000 cars a year gets one allowance for every car and hands one back for every car that is not zero-emission. XPeng's 904 cars in 2025 were all electric, which leaves it about 900 to sell. Allowances traded in 2024 averaged less than a third of the payment then in force.

In Australia, XPeng earned 165,995 units in the second half of 2025, the scheme's first period. A maker left short faces a penalty notice of A$50 for each missing unit — and the market holds a surplus of 15.9 million units, so the real price is likely far lower.

These credits are far too small to explain RMB500 million, which leaves the Porsche pool as the largest source that can be identified. XPeng keeps earning credits in both countries this year, though, and it has not said which credits it is selling, or where.

XPeng has sold credits before

XPeng joined KG Mobility's European pool for 2025, alongside Great Wall Motor, according to the Commission's list as cited by ICCT. Its results for the fourth quarter of 2025 named “carbon credit trading” for the first time among the reasons its services revenue rose, without giving an amount.

In the first quarter of 2026 XPeng said credits contributed nothing. Neither its second-quarter results nor its half-year report, filed on 28 September, mention them. That points to this year's money coming mostly in the second half, although XPeng has not said that the second quarter had none. The Chinese outlet LeiFeng reported in August, citing its own sources, that the Porsche revenue would be booked from the third quarter.

How much RMB500 million is

It would be about an eighth of XPeng's gross profit in the second quarter of 2026, RMB4.08 billion, and about a sixth of its net loss for the first half, RMB3.12 billion (Financials).

XPeng has never given the margin on credit sales. The vice-president called it high-margin income, which fits a credit that comes from cars already built and sold, but XPeng has not said what the deals cost to arrange or what, if anything, it shares with partners.

Leapmotor is the only other Chinese carmaker to have put a figure on its credits. Its finance chief said it earned RMB800–900 million from them in the first half of 2026, when it exported about 96,300 cars, and that prices were lower than in 2025.

What is still unknown

XPeng has not named its other buyers or its prices, or said which years the RMB1 billion covers. Both figures are expectations, not revenue already booked. The third-quarter results in November should show whether carbon credits are back among the reasons services revenue changed.