The global car industry could exceed its greenhouse gas emissions targets by up to 75%, according to a new report.
The assessment by consultancy Kearney says that at current rates the passenger car industry will have broken its 2050 emissions targets 15 years early and calls for immediate action, warning the current trajectory is “too close for comfort”.
The report looked at projected emissions from vehicle production and use and compared it with the “carbon budget” set out by the Intergovernmental Panel on Climate Change (IPCC) to keep global warming at less than 1.5 degrees by 2050. It estimated that at current rates, the industry will have used its “budget” by 2035 and will have exceeded it by 75% by 2050.
The passenger car industry is estimated to account for around 15% of global greenhouse gases and changes in it are seen as vital to helping keep global warming below the 1.5-degree and avoiding long-term harmful climate change.
The report, commissioned by electric car brands Polestar and Rivian, says a three-pronged approach is vital to quickly cutting the industry’s emissions, including the rapid shift from internal combustion vehicles to EVs, as well as a switch to renewable energy production and moves to decarbonise the manufacturing process.
Angela Hultberg, global sustainability director at Kearney, said: “The result of our modelling clearly shows that the industry needs to accelerate the pace of becoming a low carbon industry. We looked at different scenarios, different data points, and the conclusion is that no matter how you model it, we are far too close for comfort.
“It will take collective action to solve some of the issues at hand, and we look forward to seeing what the manufacturers will do in the near future.”
‘Aggressive EV shift not enough’
According to the reports’ estimates: “to stay on the 1.5-degree pathway for 2050, BEV share of sales must grow from 6% to close to 100% by 2032”. It estimates that such a shift would cut the 2050 “overshoot” by 25%.
Although EV sales are rising rapidly in many markets - they increased 40% between 2021 and 2022 in the UK - the report warns progress will face challenges in regions where disposable income is relatively low. Some car makers, including Toyota, have also argued that EVs are not currently the correct solution for every market and use.
The study also warns that an “aggressive” global shift to electric cars will not be sufficient, highlighting the impact of EV charging powered by fossil fuel power stations. Its authors note: “The shift to electric power trains is only as clean as the power source used to charge the vehicle.” They estimate that to stay on the 2050 pathway, EV charging provision needs to move from 39% fossil-free energy to 100% by 2033.
Even if those two ambitious targets are achieved, the report says there is a need for major changes in the vehicle supply chain to cut emissions in the production of electric cars. It warns of an “enormous task” to reduce manufacturing and supply chain emissions by 81% by 2032.
Key issues in the supply chain include the amount and type of energy used to produce the steel and iron, and aluminium used in vehicles, as well as energy associated with the creation of battery packs for EVs. The report suggests that a move to smaller batteries, helped by improved charging infrastructure, could help reduce some of the impact of battery production, along with the full electrification of their manufacture.
It also suggests that car makers need to work more closely together on “collective actions” to set common standards for supply chain and manufacturing requirements.
What are car makers doing to cut emissions?
Most car makers have already committed to creating largely or fully electric model ranges. Jaguar says it will go all-electric by 2025, followed by Vauxhall in 2028 and Volvo and Mercedes in 2030. Ford plans to be all-electric in Europe by 2030, while several other brands, including Kia and Audi have set European targets of 2035. However, many have less ambitious targets outside of Europe, with timetables stretching to 2040 and beyond.
Most have also made commitments to making their operations fully carbon neutral by 2050. Some, including Ford, Mercedes and Toyota, have set more ambitious targets for their European operations.
Some of this is achieved by using carbon offsetting schemes, while many car makers are also focusing on cutting energy use and using renewable energy at their factories. Volkswagen’s Zwickau plant, for example, where the electric ID.3 is built, is powered by hydroelectricity which saves 106,000 tonnes of CO2 per year. Land Rover has cut its operating CO2 emissions by 74% since 2007 through energy conservation and renewables. It has also reduced the energy used to build its vehicles by 37%.
Elsewhere, Volkswagen has stipulated that its battery suppliers only use renewable energy in their production processes and Mercedes has announced plans to use “green steel” - made without the use of fossil fuels - in its cars by 2025. Toyota has stated that its European factories will be carbon neutral by 2030 and it is aiming for carbon neutrality across all goods and logistics operations in Europe by 2040.
Fredrika Klarén, Polestar’s head of sustainability, commented: “Car companies may be on different paths when it comes to brand, design, and business strategies, and some won’t even admit that the road to the future is electric. I believe it is, and that the climate crisis is a shared responsibility, and we must look beyond tailpipe emissions.
“This report makes clear the importance of acting now and together. There’s a clear cost to inaction, but there’s also a financial opportunity for innovators who find new answers to the challenges we face.”