In the last few years, trends in opposition to environmental damage and a move towards being more environmentally friendly have expanded inside the automotive industry. The automakers understood the global climate crisis was worsening and that they needed to start planning en masse for carbon-neutral futures.
Numerous ventures were initiated, including path-breaking technologies, adaptation to renewable energy, and sustainable manufacturing. In this article, we will explain how many of the automakers have taken steps to achieve these targets of carbon neutrality, reducing emissions, and creating a viable future for the automotive sector.
What Car-Buyers Need to Know About Carbon Neutrality in the Automotive Industry
As for carbon neutrality, it is defined as having no net climate change impact (adding nothing to the atmosphere) by balancing emissions with equivalent reductions or removing emitted carbon. And how can it be—when the automotive sector, historically one of the largest contributors to greenhouse gases, has pledged pursuit of carbon neutrality to counteract climate change?
The automotive sector represented a large proportion of that, with 24% of global CO2 emissions in 2020, including road vehicles and others as per the International Energy Agency (IEA). Automakers are adopting wide-ranging sustainability strategies in response to the urgency of tackling these emissions.
Ambitious Goals for Carbon Neutrality
In light of a rising tide of environmental discourse, multiple automakers are sounding alarm bells and pledging to be carbon neutral by the time 2040 rolls around. General Motors (GM), for example, pledged to be carbon neutral by 2040 in its global products and operations. GM is committed to a future of zero crashes, zero emissions, and zero congestion.
Of course, Ford also unveiled its own plan to be completely carbon neutral globally by 2050, with interim targets pointing to reducing emissions by 40% by 2035. The goals clearly acknowledge the role of the automotive industry in contributing to climate change and the importance of integrating sustainable operations.
Switching to EVs
One of the major steps taken by automakers to achieve carbon neutrality targets is moving towards electric vehicles (EVs) from internal combustion engine vehicles. The move to EVs changes the fabric of the automotive world fundamentally.
Electric Vehicle Investment in Technology
Automotive companies have invested and focused heavily on research & development to improve electric vehicle technology. Volkswagen has pledged more than $86 billion to electrification in the next five years, with a goal of building half of its 12 million electric vehicles annually by 2025. This is such a large investment as the carbon footprint of cars has become increasingly important.
Diversifying the EV Portfolio
Electric vehicle options from major automakers have also increased, making for an overall more robust consumer EV market. Tesla, the automotive EV market leader, has only strengthened its position as sales climbed, surpassing 936,000 units through 2021. The quicker automakers roll out electric models, the more choices consumers are given to transition from ICE to zero-emission vehicles.
Sustainable Supply Chain Practices in Manufacturing
As car manufacturers move to electric vehicles, they are also beginning to implement sustainable manufacturing practices that could eventually reduce the carbon footprint across the entire production process.
Use of Renewable Energy
Several car manufacturers have promised to use renewable sources such as clean energy within production processes. In a further example, BMW aims to utilize 100% renewable energy by 2020 for production. Meanwhile, the company noted that its plant in Leipzig is run on wind power, which has helped it halve CO2 emissions per vehicle produced.
Circular Economy Principles
Automakers have been leaning into circular economy principles, towards reusing and recycling materials that make up vehicle production. Ford has a closed-loop recycling system that allows aluminum and plastics, among other materials, to be reused in production. Ford reports that this approach—improving efficiency 100-fold—has slashed material costs by up to 50% and generated significant emission savings.
Prioritizing Carbon Offset Programs
Car manufacturers are studying possible carbon offsetting initiatives because they cannot completely prevent some emissions during their production.
Investing in Carbon Offsetting Projects
Automakers have made investments into projects to offset CO2 emissions. For example, Honda has pledged to fund replanting and green initiatives such as its carbon emissions. By 2030, Toshiba says it will compensate for 3 million tons of CO2 emissions annually due to these initiatives.
Sustainability Partnerships
Automakers eager to advance their sustainability credentials have turned to partnerships with environmental groups and NGOs. When automakers collaborate with the right organizations for conservation and sustainability, they increase the magnitude of positive influence they have while leading us to a cleaner world.
Regulatory and Government Incentives
The journey by the automotive industry to carbon neutrality will heavily be influenced by government policies and regulations. Several countries have legislated increasingly stringent emission standards with targets over the next two decades, although not all national emission standards are implemented.
Emissions Regulations
Globally, there are stricter emissions regulations than ever before, which forces the automotive industries to innovate and produce cleaner vehicles. For instance, the target for average CO2 emissions from new cars in 2030 will be 55% lower in the European Union. These regulations provide clarity for automakers and a market signal to invest in sustainable vehicle technologies.
Incentives for Electric Vehicles
To persuade more consumers to shift to electric cars, governments have introduced several incentives such as tax reliefs and credits. In the United States, for example, individuals who acquire qualifying electric vehicles are eligible for a federal tax credit of up to $7,500. Besides lowering the cost of EVs, the incentives are designed to increase demand for these environmentally friendly technologies.
Advances in Hydrogen Fuel Cell Technology
As automobile manufacturers strive to attain carbon neutrality, there has been growing interest in hydrogen fuel cell technology as a potential substitute for battery electric vehicles.
Hydrogen as a Clean Fuel
Hydrogen fuel cell cars produce no tailpipe emissions, which helps achieve the desired sustainability efforts. Manufacturers like Toyota and Hyundai have made unprecedented investments into the technology, with Toyota Mirai and Hyundai NEXO dominating the market. According to the International Hydrogen Fuel Cell Association report, by 2030, fuel cell vehicles could form 10% of the global market.
Consumer Engagement and Education
Creating customer awareness and acceptance of electric cars and other sustainable technologies is essential.
Outreach Programs
Vehicle manufacturers are also introducing outreach programs to help educate consumers about the benefits of electric cars. This includes running marketing campaigns, hosting workshops, and attending events to create awareness on electric car technologies in the context of the consumer incentives available.
Customer Insights and Adaptability
Automakers will be forced to listen to their customers and adapt their offerings accordingly. Knowledge of what consumers like and dislike about electric cars allows manufacturers to better tailor their products and introduce new models in a way that appeals to buyers.
Partnerships and Collaborations
A joint effort by the automotive industry and other stakeholders, such as governments, technology companies, and environmental groups, will propel the industry to carbon neutrality.
Public-Private Partnerships
These partnerships can encourage innovation and infrastructure development by bringing together automakers and governments. Collaboration with charging network providers can make electric vehicle ownership less stressful by increasing the number of accessible and reliable charging stations.
Innovation with Tech Companies
Automakers are also tapping into technology companies to lead the way in battery tech, autonomous driving, and connected vehicles. Automakers can use these opportunities to create more sustainable and efficient vehicles by working with tech companies like DiDi in creating cutting-edge technologies.
A Collaborative Effort for a Sustainable Future
We are entering a crucial period as companies race to carbon neutrality, and the future of transportation takes shape. As stakeholders, consumers, and automakers come together offering electric and hydrogen vehicle options while incorporating sustainable practices, the road to a cleaner future will inevitably be driven by them. With governments, companies, and consumers joining hands to support these initiatives, the automotive sector will gradually move towards a more sustainable and green model, driving us closer to a healthier future ahead.
