Carbon-cutting policies at the forefront of the world’s biggest automakers’ business plans

Some of the world’s biggest automakers are adopting carbon-cutting policies despite an expected fall in car sales post-COVID-19. Macro trends have been identified explaining why the shift to sustainability is accelerating across the globe.

The world’s biggest automakers are making commitments to tackle their carbon emissions. Adopting carbon-cutting policies in their business models seems to be at the forefront of a lot of automakers minds. Porsche have a solid commitment to sustainability and reducing their carbon emissions. It seems many other large companies are following suit.

It is clear that the world is accelerating up their commitments to a clean future and adopting carbon-cutting policies post-COVID.

Just this week, German automotive company, BMW, have set a huge goal of reducing its carbon emissions per car by at least one-third by 2030. By developing and selling electric vehicles, incorporating more sustainable materials, working with its supply chain vendors and adopting clean energy facilities, BMW hopes to achieve its sustainability targets.

As part of an accelerated push into the technology to catch up with Tesla, BMW intends to offer 25 electric and hybrid models by 2032. Concerning their huge targets, Chief Executive Officer, Oliver Zipse said: “We will report on our progress every year and measure ourselves against these targets”. He also added that BMW will “overachieve” meeting stricter emission limits that are taking effect in Europe this year.

BMW also wants a third of its cars sold in Europe to be electric by 2025. Earlier this month the German automaker signed a $2.3 billion order for battery cells made by Sweden’s Northvolt AB to help with their sustainability plans. 

Ford and Volvo following the trend

American automaker, Fordannounced last month their plans to be carbon neutral by 2050. This is a striking commitment for an American company, and they are the only full-line US automaker doing its part to reduce CO2 emissions in line with the Paris Agreement. 

To achieve their goal, Ford will focus on three areas that account for about 95 percent of its CO2 emissions; vehicle use, supply base and company’s facilities. The company pledge to ‘protect the planet, put people first and create tomorrow, together’. 

Mary Wroten, director of sustainability at Ford has stated that Ford is aiming for 2050 to align with the Paris Commitments and because: “…Anything after 2050 is unacceptable climate change risk”.

With Asia rapidly switching to sustainable modes of transport, the continents largest automakers are also pledging carbon-cutting policies. 

Volvo Cars, owned by China’s Geely Holding (not to be mistaken by Volvo Group) is pledging to become carbon neutral by 2040. By 2025, Volvo Cars plan to reduce the CO2 footprint of each car it makes by 40 per cent. 

Chief Executive of Volvo Cars, Hakan Samuelsson stated concerning their commitment to sustainability: “We will address what we can influence, by calling on our suppliers and the energy sector to join us in aiming for a climate-neutral future”.

Why are companies committed to carbon-cutting?

Although automakers are expecting slower sales this year to a global recession, three macro trends have been identified behind the carbon-cutting policies adopted by car companies;

  • Regulators in Europe and China are tightening emissions rules and pushing automakers that sell into those markers to launch zero/low-emission vehicles. Although the US, at a federal level, is lagging behind in this movement, Joe Biden has promised to return the US to the Paris Agreement if he becomes president.
  • Over the years the auto industry has been slow to adopt zero-emission vehicle technologies. Opening up opportunities for sustainable EV companies like Tesla and Nikola to emerge. Losing market share, and fear of losing market share is a key driver of remaking the auto industry around sustainability.
  • The pandemic as a learning tool showing the need for change. “Build back better” is a refrain used repeatedly in relation to rebuilding post-COVID-19 sustainably, urging companies and leader to adopt carbon-cutting policies. In Europe particularly, there has been a huge push for the adoption of clean transport with the EU’s €750bn recovery plan to boost transport.

The identification of these macrotrends, along with the world’s biggest automakers committing to carbon-cutting policies, shows the worldwide commitment in transforming the mobility industry. It is exciting to think of what is to come in the world’s recovery post-COVID-19.

Catherine Gray

Catherine Gray is a Senior Writer at CleanTech News, eager to be part of the important discussion around clean technological advances, promoting and celebrating the things that can be achieved. Catherine is particularly interested in how writing can have an impact on people’s lives and hopes to make her own mark in the CleanTech community through championing new innovative technologies. With huge admiration for companies and individuals with the dedication to make positive advances towards a carbon net-zero future and an advocate for sustainably in day to day life, Catherine looks forward to being actively involved in the CleanTech community.