China’s electric vehicle (EV) maker Leapmotor has signed a carbon credit transfer agreement with Italy’s Stellantis. The plan sees Stellantis buying CO₂ credits from Leapmotor, which can generate these credits through producing and selling zero-emission vehicles (ZEVs).
The deal reflects how EV manufacturers are not only cutting emissions but also earning revenue by selling tradable carbon credits. Let’s uncover how.
Trading Carbon and Cars: Inside the Leapmotor-Stellantis Deal
In a strategic move, Leapmotor announced that its subsidiary Leapmotor Power has signed a carbon credit transfer agreement with Stellantis units in China. The deal allows Stellantis’ Chinese units to purchase carbon credits from Leapmotor, helping the global auto giant comply with China’s strict vehicle emission regulations.
Leapmotor’s subsidiary will transfer CO₂ credits to several Stellantis brands, such as Fiat and Jeep, under a plan that likely spans several years. Each credit represents one tonne of CO₂ avoided by selling an EV instead of a fossil-fuel vehicle.
The Italian carmaker aims to be net zero by 2038, and part of this goal is rolling out battery electric vehicles (BEVs) by 2030. Apart from buying carbon credits, Stellantis is also ramping up its EV strategy, investing in battery production and infrastructure. The company aims for 100% battery electric vehicle (BEV) sales in Europe and 50% in the U.S. by 2030.
While specific volumes and pricing weren’t disclosed, Stellantis and Leapmotor called the deal “landmark.” It signals a growing trend: EV makers increasingly rely on carbon credit sales to boost revenue and offset costs.
The transaction highlights the growing importance of carbon credits in global automotive strategy. By selling credits from its zero-emission EVs, Leapmotor not only gains new revenue but also strengthens its relationship with Stellantis, which owns a 20% stake in the Chinese EV maker.
Moreover, the agreement reflects Stellantis’ push to meet regulatory requirements while scaling up its electrification strategy in a cost-effective way. Leapmotor further said the agreement complies with China’s “Parallel Management Method for Passenger Vehicle Corporate Average Fuel Consumption (CAFC) and New Energy Vehicle (NEV) Credits.”
This policy encourages automakers to improve fuel efficiency and expand NEV output to earn tradable credits, aligning with China’s national goals to peak carbon emissions before 2030.
Turning Emissions Into Earnings: How EVs Mint Carbon Credits
Electric vehicles play a crucial role in the global shift to cleaner transportation, not just by reducing tailpipe emissions, but also by generating carbon credits. Because EVs produce zero direct emissions, each vehicle sold contributes to a manufacturer’s carbon offset capabilities.
These offsets can be converted into carbon credits, which are then traded or sold to other companies that need to balance out their carbon footprint. This system provides a major incentive for automakers to go green.
Zero-emission vehicles (ZEVs) automatically earn credits under many emissions rules. Regulators like California, China, and the EU set ZEV quotas, mandating that a share of each automaker’s sales must come from EVs. If carmakers fall short, they must buy credits from those, like Leapmotor, that sell EVs.
Tesla is the most notable case. In 2024, it earned $2.76 billion in carbon-credit revenue, up 54% from 2023 ($1.79B). That credit sales helped Tesla generate nearly 30% of its quarterly profits in late 2024.
Since 2017, Tesla has made over $10.4B from regulatory credit sales. Its dominance shows how EV-led carbon programs can turn into powerful income streams.
This income supports Tesla’s bottom line and helps fund further investment in clean technology. As more countries introduce stricter emissions regulations and carbon pricing systems, EV makers like Leapmotor and Tesla are well-positioned to benefit.
Leapmotor Cashes In: Joining the Billion-Dollar EV Credit Market
Leapmotor’s deal with Stellantis means it can tap into this same market. As more countries tighten emissions rules, demand for credits is rising. For Stellantis, buying Leapmotor’s ZEV credits helps the company meet regulatory targets, especially in Europe, where non-compliance can trigger fines of €95 per gram of CO₂ per kilometer.
For Leapmotor, this provides steady revenue and strengthens its financial profile. The company can now scale production more confidently and reinvest in EV technology, production capacity, or market expansion.
Bumps in the Fast Lane
EV credit markets can shift quickly. In the U.S., lawmakers are considering phasing out credit programs, which would threaten Tesla’s model. In the EU, pooling credits between automakers is allowed, but regulators may change these rules.
- SEE MORE: EU’s 2025 Emission Rules Led Tesla and Mercedes to Pool Carbon Credits to Avoid $15.6 Billion Fine
Analysts also warn that as every carmaker ramps up EV production, credit prices may drop. Tesla’s revenues rose when others lagged, but as more EVs flood the market, credit demand could weaken and prices fall.
What It Means for the EV Market and Carbon Goals
The Leapmotor-Stellantis carbon credit deal shows how traditional and electric carmakers can work together to meet climate targets. It also reveals a growing trend in the EV space, where clean car companies gain an additional stream of revenue by selling credits to those that lag behind in electrification.
For Leapmotor, the deal boosts credibility and financial flexibility as it expands in and outside China. For Stellantis, the agreement helps it stay compliant in the world’s largest auto market while giving it time to accelerate its own EV rollout.
This model mirrors what Tesla has long benefited from and could soon become a standard revenue model for many EV players. With global carbon credit markets expected to reach hundreds of billions of dollars by 2030, carbon trading between automakers could significantly impact the industry’s economics and the pace of decarbonization.
Bloomberg forecasts global EV sales to take 50% of the market by 2030. China remains the top market globally. 
As global policies tighten and consumer demand for EVs grows, automakers will likely explore more creative ways, like this partnership, to manage their carbon footprints. These deals reinforce how EVs are more than just clean transport—they’re a powerful lever in the global carbon economy.
Looking Ahead: Leapmotor’s Path to Profit and Sustainability
Leapmotor’s deal with Stellantis positions it not only as an EV innovator but also as an energy-efficient exporter of carbon compliance. As global emissions rules tighten, its ability to generate carbon assets may become a key revenue source.
The deal also highlights how the shift to electric vehicles is reshaping global emissions markets. Automakers that sell EVs can now earn substantial revenue through regulatory credits, while legacy firms comply with climate rules.
Tesla’s multi-billion-dollar credit earnings show just how lucrative this business can be. As EV sales grow, the competition for credits will intensify. For EV producers, carbon credits offer not just sustainability merit but real financial value, bolstering their position in the global automotive market and speeding the transition to net-zero transport.
The post Stellantis and Leapmotor Forge Carbon Credit Deal Amid Booming EV Market appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
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