A Volkswagen joint venture in China has agreed to buy green car credits from Tesla to help meet local environmental rules, reports Reuters, citing three people unwilling to reveil their names.

China operates a credits system that encourages automakers to adopt clean energy. Manufacturers are rewarded with positive new energy points to offset negative points received for producing fossil fuel vehicles. They can also buy new energy points to ensure overall compliance with the target, although such transactions are usually made between affiliates that have the same major shareholder.

The deal, the first of its kind to be reported between the two companies in China, highlights the scale of the task Volkswagen faces in transforming its huge petrol carmaking business into a leader in electric vehicles to rival Tesla.

Source: https://www.reuters.com/article/us-volkswagen-tesla-china-exclusive/exclusive-volkswagen-to-buy-credits-from-tesla-in-china-to-comply-with-environmental-rules-sources-idUKKBN2BO542