Zero-emissions vehicle (ZEV) credit

A zero-emissions vehicle (ZEV) credit is a tradeable financial instrument that provides zero-emissions vehicle manufacturers with a revenue stream that recognizes the zero-emissions attribute of their vehicles. ZEVs are used under a ZEV mandate program requiring car manufacturers to sell a certain percentage of ZEVs. Manufacturers that sell ZEVs receive ZEV credits for each sale. Those credits can be used to satisfy their own ZEV mandate requirement.  But if the manufacturer sells more ZEVs than mandated, the excess credits can be sold to other vehicle manufacturers who are short of their requirement.