At this point, just about every car company has committed to spending the next few years adding electric and hybrid vehicles to their fleets or eventually phasing out internal combustion engines entirely.
But in a new climate study released this week, EV startups Rivian and Polestar have a more dire message: electrification alone will not be enough.
A new climate report from global management consulting firm Kearney commissioned by the two automakers indicates that, despite a massive rollout of new EVs and hybrids in the coming years, the global automotive industry is still “far off track” on reducing greenhouse gas emissions in a way that can meet targets set by the Paris agreement. And that does not even account for emissions from the hundreds of millions of new gasoline and diesel cars due out over the coming years and decades as the EV pivot takes place, which Greenpeace Germany called out in a November report.
Electrification alone will not be enough
The biggest problem, the Kearney report says, is that automakers have been primarily focused on reducing tailpipe emissions that come from their car fleets via electrification. And it’s true that this is the primary driver of greenhouse gas emissions from the automotive sector.
But in order to help meet the Paris agreement’s target of limiting the global temperature increase to 1.5 degrees Celsius above preindustrial levels, the study says the auto industry must play a stronger role in increasing renewable energy in power grids and reducing greenhouse gas emissions across its entire supply chain.
“Few reports project a scenario that is achievable without accelerated action,” the report authors write. “Certainly, the trajectory is too close for comfort.”
The two electric automakers — one an American startup focused on trucks and SUVs and the other a Swedish brand backed by Volvo and its Chinese parent company Geely — jointly commissioned the report, a spokeswoman for Polestar said.
It’s rather unusual for two automakers from different countries, who are technically competitors, to collaborate on a report that sounds the alarm for the rest of the industry.
“The trajectory is too close for comfort”
“We have both been frustrated by the lack of an honest, data- and science-led pathway for the car industry to remain in line with [the Intergovernmental Panel on Climate Change, or IPCC’s] 1.5-degree limit, and strongly felt everything was moving too slow,” Polestar spokesperson Ellen Broomé told The Verge.
“This is the first time either of us had seen a report that calculated the remaining carbon budget for the car industry and what it would take to get on track – the results were shocking and sobering,” she added. “It was really clear that electrification alone will not be enough and that we need urgent and collective climate action.”
The two automakers said the report was shared with several “leading” automakers ahead of its release, and they, too, were invited to discuss its findings for possible future collaboration. Spokespeople for both declined to elaborate on which other automakers were contacted or their responses.
“This is not a pledge or a forum for endless discussions, but an opportunity for carmakers to acknowledge the data and together start taking action where they can – not everyone might do it all at once but it’s more important we start now where we can,” Broomé said.
This is far from the first time that the auto industry has been portrayed as behind the curve on climate goals, even with its aggressive EV transition underway. Just last week, the nonprofit International Council on Clean Transportation released a white paper saying that EVs would have to account for two-thirds of all US light-duty vehicle sales in 2030 to meet the Paris goals, which is far more than the Biden administration’s goal of 50 percent EV sales by that year.
“It was really clear that electrification alone will not be enough and that we need urgent and collective climate action.”
The Kearney report was based on publicly available data from the International Council on Clean Transportation as well as the IPCC and the International Energy Agency. When it comes to zero-emission vehicles, the Kearney report centers almost entirely around battery-electric cars, not ones powered by other means like hydrogen fuel cells. “While other technologies such as various forms of fuel cell show emerging potential, today BEVs are the dominating technology, feasible to deploy at mass scale,” the report says.
It also points out how aggressive EV rollouts must be in the coming years. That may even be at a level that’s close to impossible given economic and logistical concerns, especially in developing markets where electrification of cars could prove more difficult.
Globally, to stay under the Paris target of 1.5 degrees Celsius, EVs need to be nearly 100 percent of all new cars sold by 2032, according to the report — a goal that’s all but impossible. Comparatively, the International Energy Agency’s more conservative recommendation calls for 60 percent of new cars sold to be EVs by 2030 in order to reach net-zero carbon emissions by 2050.
“Beyond the immense operational hurdles to overcome, such an ambition level and radical acceleration would also cause significant socioeconomic implications that vary by region, posing challenges, especially in regions with high population density and relatively low disposable income,” the study’s authors wrote. The average new EV costs were around $65,000 late last year.
On the second front — reducing emissions from power sources EVs will need to run — the study concedes that’s normally been the purview of energy companies and not automakers. However, car companies “do offer significant consumer-facing opportunities to influence behaviors,” the study says. A more outside-the-box approach may be needed soon. Examples could include automakers investing in clean energy companies or starting new ventures in that area, the study said.
But it’s in the area of supply chains where the Kearney report indicates automakers may have the most work to do. While EVs generate vastly fewer “life-cycle” emissions than gasoline cars, the additional resources related to battery production put supply chain emissions 35 to 50 percent higher than internal combustion engines, the study says. Most of that can be blamed on battery production.
Image: Kearney
“The largest footprint comes from batteries, steel and iron, and aluminum used in vehicles, more specifically the amount and type of energy used in manufacturing,” the study says. Reaching the Paris climate goals would require almost all of the production processes to run on clean energy, including the extraction and processing of materials for battery packs.
That will prove remarkably difficult. It will involve automakers working to reduce the overall emissions used in battery production in the next few years, while heavily retooling the materials used in their manufacture. The study calls on automakers to adopt universal standards to collectively work toward these goals.
“The largest footprint comes from batteries, steel and iron, and aluminum used in vehicles”
Many automakers are already working to reduce emissions across the board and not just transition to battery-powered vehicles. BMW, for example, has announced aggressive sustainability goals that include ramping up recycled and reusable materials used for production and bringing total carbon emissions down 40 percent by the end of this decade. General Motors says it will be able to run on 100 percent renewable energy at its sites by 2025. Even Mazda is seeking to make its factories carbon neutral by 2035.
Still, most automakers are leading their EV rollouts with large SUVs and trucks — in part because their higher price tags help finance the EV revolution — even though those vehicles are less environmentally friendly due to their greater charging needs and additional resources required for production.
For Polestar and Rivian, the plans to push toward the Kearney report’s suggestions include the Polestar 0 climate neutral car project and Rivian’s own fast-charging network running on renewable sources. Rivian spokesperson Harry Porter also said the automaker is investing in renewable projects, including a solar power project in Tennessee.
The alternative to not undertaking these efforts, the Kearney study says, is not something people will want to bear.
“Every year that passes without significant reductions is an opportunity lost and a setback from which we will have to work even harder to recover,” the study says. “We need to come together to create a plan to tackle the challenge and deliver on that plan as quickly as possible.”
