The world’s biggest automakers are ramping up their carbon commitments even as they struggle to build back in the wake of the pandemic.
This week, Germany’s BMW took the plunge and set a goal to reduce its carbon emissions per car by at least one-third by 2030. Like its peers, BMW plans to reach those targets through a combination of developing and selling electric vehicles (including newly announced electric versions of the 5 Series sedan and X1 compact SUV), combined with incorporating more sustainable materials, working with its supply chain vendors and adopting clean energy for facilities.
Last month, Ford announced that the company would become carbon neutral by 2050, a striking commitment for an American automaker. Mary Wroten, director of sustainability at Ford, told GreenBiz that Ford is aiming for 2050 to align with the Paris Commitments and because “anything after 2050 is unacceptable climate change risk.”
Several big European and Asian automakers already have started down this road. Volvo Cars — owned by China’s Geely Holding and not to be mistaken with Volvo Group — is pledging to become carbon neutral by 2040. By 2025, Volvo Cars plans to reduce the CO2 footprint of each car it makes by 40 percent.
We have an obligation to get electrification right.
Volkswagen, which has linked electric vehicles to its comeback following the emissions scandal, says it’ll be carbon neutral by 2050. “We have an obligation to get electrification right,” Volkswagen Group of America CEO Scott Keogh said in a release last year.
So what’s behind this carbon car company tipping point, even as automakers are expecting slower sales this year due to a global recession? Three macrotrends:
- Regulators in Europe and China are tightening emissions rules and driving automakers that sell into those markets to launch zero- and low-emissions vehicles. The U.S. at a federal level is lagging behind this movement, but states such as California have been acting much more aggressively to mandate emissions reductions targets for vehicles (such as the new Advanced Clean Truck rule).
- In general over the years, the auto industry has been slow to adopt zero-emission vehicle technologies. That has created an opening for upstart automakers such as Tesla, Rivian and Nikola Motors to emerge and gain customers from big auto. Rivian won a 100,000 electric delivery and freight truck deal with Amazon. Tesla is eligible to join the S&P 500 after four profitable quarters. Losing marketshare, and fear of losing marketshare, is a key driver of remaking the auto industry around sustainability.
- Some automakers are using the struggles of the pandemic to lean into sustainability goals. “Build back better” is a refrain I’ve heard from a variety of transportation companies in recent weeks. In Europe, there’s a major push to fund clean transportation infrastructure, both EV chargers and hydrogen fueling, in stimulus packages.
What do you think? Are the automakers doing enough when it comes to carbon emissions? Love to hear your thoughts: [email protected].
This article is adapted from GreenBiz’s weekly newsletter, Transport Weekly, running Tuesdays. Subscribe here.