HK Stock Market Move | LEAPMOTOR (09863) rises more than 3% and reaches a 1.5 billion carbon credit transfer agreement with Stellantis.

LEAPMOTOR (09863) rose more than 3%, as of the time of writing, up 3.09% to 56.65 Hong Kong dollars, with a turnover of 243 million Hong Kong dollars. On the news front, on July 1st, LEAPMOTOR announced the formal signing of a carbon credit transfer agreement with a subsidiary of Stellantis Group. The agreement is valid from June 30, 2025 to December 31, and covers all carbon credits generated by LEAPMOTOR's sales of pure electric (BEV) and range-extended (REEV) vehicles in the EU and UK markets. The annual trading amount is capped at 1.5 billion RMB. According to the agreement, the pricing mechanism for carbon credits is determined through negotiations based on market supply and demand, with LEAPMOTOR invoicing Stellantis every six months, with payment required within 30 days. It is understood that brands under Stellantis such as Jeep and Peugeot are still predominantly selling fuel-powered vehicles in the European market. Under the EU's "2035 Ban on Sale of Fuel-Powered Vehicles Act," they must reduce fleet average carbon emissions to below 95gCO/km by 2025, with a shortfall of approximately 1.2 million carbon credits. This transaction can cover 60% of their annual demand, avoiding a penalty of approximately 240 million euros. It is worth mentioning that it is not uncommon for domestic brands to sell carbon credits to foreign brands, with BYD Company Limited and NIO previously selling carbon credits to Toyota and Volkswagen, while ZERO RUN has now tied up with shareholder Stellantis to establish a long-term credit supply relationship, making their business model more sustainable.