Polestar (NASDAQ: PSNY) and Rivian (NASDAQ: RIVN) have collaborated on a ‘Pathway Report,’ which concludes that the automotive industry is on track to exceed the IPCC’s 1.5-degree pathway by 75% by 2050. The report was initiated by two pioneering EV manufacturers in response to the climate crisis. Kearney, a global management consulting firm, produced the report, which uses existing, open-source data to model the current trajectory of emissions from the automobile industry.
Passenger vehicles currently account for 15% of total global GHG emissions. 1 The IPCC has stated that all GHG emissions must be reduced by 43% by 2030, and the report makes it clear that the automotive industry is far off track, and will have spent its entire CO2e budget by 2035 if urgent action is not taken.
Despite the bleak outlook, the report suggests that the auto industry has a chance to turn things around. The industry can quickly build the momentum needed to comply with the Paris Agreement by redirecting resources and focus. The Pathway Report focuses on the current decade and outlines immediate, clear actions that automakers can take between now and 2030, including some that can be implemented right away.
The data shows a path centered on three key levers. Lever 1 examines the rate at which fossil-fuel-powered cars must be replaced by electric vehicles, but emphasizes that this alone will not suffice. Levers 2 and 3 will necessitate significantly more effort:
- Increasing the use of renewable energy in power grids;
- Reducing greenhouse gas emissions in the manufacturing supply chain.
Pulling only one or two levers will be insufficient and will only reduce overshoot. At the global level, automakers must act collectively on all three levers at the same time. To begin, the industry must accelerate the transition to electric vehicles by investing in manufacturing capabilities and establishing a firm global end date for fossil fuel car sales. Second, expand renewable energy supply to global grids, allowing EVs to reach their full potential via green charging. Third, decarbonize the manufacturing supply chains for these vehicles by using low-carbon materials and investing in renewable energy supply chain solutions.