Auto industry misses climate target, says Polestar-backed report

A report funded by Polestar and Rivian found that the global auto industry will “massively” miss the United Nations’ climate targets if it doesn’t go all-electric by 2033.

The Pathway Report, released by management consultancy Kearney and the two electric vehicle brands, says the industry will exceed the IPCC’s 1.5-degree path by at least 75 percent by 2050.

It calls on automakers and other OEMs to come together around the table to discuss where they can work together to achieve this goal.

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The International Energy Agency says the remaining global emissions budget is about 500 GtCO2e – or 500 gigatons of carbon dioxide equivalent – to stay below a 1.5 degree Celsius global temperature rise.

Kearney’s report notes that at current rates, that budget will be reached by 2035.

The report uses existing open source data to determine the history of emissions from the automotive industry.

Passenger cars are currently responsible for 15 percent of all global greenhouse gas (GHG) emissions, and the IPCC has declared that all greenhouse gas emissions must be reduced by 43 percent by 2030.

The Pathway Report suggests that there are three “levers” that need to be pulled to curb emissions.

Lever one is full EV conversion across the global fleet, while lever two is powering this EV-only fleet with fossil-free energy, and lever three is making significant strides in sustainable production and manufacturing.

The latter includes the manufacture of electrification cells and packages as well as material extraction and processing. The goal is a reduction of 81 percent by 2032.

According to the report, however, the industry needs to address all three simultaneously and at an accelerated pace — just pulling on one lever is not enough.

It goes on to say that just pulling the first lever will reduce the overage from 75 percent to 50 percent, while switching charging to fossil-free energy sources will further reduce the overage to 25 percent.

It states that tailpipe emissions from internal combustion engine vehicles account for 60-65 percent of a vehicle’s total life cycle emissions.

Electric vehicles suffer from supply chain emissions that are 35 to 50 percent higher than internal combustion engines, mainly due to the additional emissions from battery manufacturing.

“The historic conflict between sustainability and profitability is diminishing, but it remains significant,” the report notes.

“We need to give the right value to sustainability and the cost of inaction.”

It notes that there has been progress. Global sustainability investment totaled US$35.3 trillion (AUD50.7 trillion) in 2021, more than a third of all assets in five of the world’s largest markets.

These investments have grown by more than 15 percent annually since 2018.