Polestar and Rivian have collaborated on a ‘Pathway Report’ which reveals the dire state of the automotive industry’s impact on the climate. The report concludes that the industry is set to overshoot the IPCC’s 1.5-degree pathway by at least 75% by 2050. The two leading electric vehicle (EV) makers initiated the report in response to the growing climate crisis. The report, which uses existing open-source data, was conducted by the global management consulting firm Kearney.
Passenger vehicles currently account for 15% of all greenhouse gas (GHG) emissions globally. The IPCC has stated that all GHG emissions need to be reduced by 43% by 2030 and the report makes it clear that the automotive industry is far off track and, alarmingly, will have exhausted its CO2e budget by 2035 without immediate action.
Despite the grim outlook, the report suggests that the car industry still has a chance to get back on track. By redirecting resources and focus, the industry can rapidly build the necessary momentum to remain in line with the Paris Agreement. The Pathway Report focuses on the current decade and outlines specific, immediate actions that car manufacturers can take between now and 2030, including some that can be triggered immediately.
The data presents a pathway based on three key levers. Lever 1 addresses the speed at which fossil fuel-powered cars need to be replaced by EVs, but it is emphasized that this alone will not be enough. Levers 2 and 3 require much more work: increasing renewable energy in power grids and reducing GHG emissions in the manufacturing supply chain. Pulling just one or two levers in isolation will not be sufficient and will only reduce the overshoot. Collective action from automakers is needed on all three levers, globally, in parallel.
Firstly, the industry must accelerate the transition to EVs by investing in manufacturing capabilities and setting a firm end date for fossil fuel car sales globally. Secondly, it must build out a renewable energy supply to global grids that will enable EVs to reach their full potential through green charging. Thirdly, it must decarbonize the manufacturing supply chains for these vehicles by switching to low-carbon materials and investing in renewable energy solutions for the supply chain.
Fredrika Klarén, Polestar’s Head of Sustainability, says: “Car companies may have different paths when it comes to brand, design, and business strategies, and some may not even acknowledge that the future is electric. I believe it is, and that the climate crisis is a shared responsibility. We must look beyond tailpipe emissions and this report makes clear the importance of acting now and together. The cost of inaction is clear, but there is also a financial opportunity for those who find solutions to the challenges we face.”
Kearney’s report has also been shared with several leading car makers and an invitation was sent to a roundtable held at the end of January to discuss areas of collective action. The goal is to find a path toward unprecedented, relevant, and collective climate action for the car industry.
Anisa Costa, Rivian’s Chief Sustainability Officer, adds: “The report’s findings are sobering, but our hope is that it lays the foundation for the automotive industry to collaborate in driving progress at the pace and scale we need and, ideally, inspire other industries to do the same. Together, I’m confident we can win the race against time.”
The Pathway Report clearly shows the cost of inaction and the strong case for sustainable development. The investment community is moving towards sustainable investment, recognizing the increasing link between sustainable transformation and financial benefits. In 2021, global sustainability investments reached USD 35.3 trillion, representing over a third of all assets.
