Polestar & Rivian report says that urgent, stronger collaborative action needed to meet emissions targets
Wed 08 February 2023
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A new report from vehicle manufacturers Polestar and Rivian concludes that the automotive industry is set to 'massively overshoot' the IPCC’s 1.5-degree pathway by at least 75% by 2050 unless urgent actions are taken soon. The 'Pathway Report' uses existing, open-source data to model the current trajectory for emissions arising from the industry.
The report, supported by management consultants Kearney, says that electrification alone is not enough. It recommends a '3-lever' approach to set industry on the right path and calls for new forms of collaboration to build rapid momentum.
Collective actions to reduce greenhouse gas (GHG) emissions in supply chain and to increase renewable energy in the grids are needed in addition to faster EV adoption.
The report says that passenger vehicles currently account for 15% of all GHG emissions globally and the IPCC has stated that all emissions need to be reduced by 43% by 2030. The report makes clear that the automotive industry is far off track, and, alarmingly, will have spent its full CO2e budget already by 2035 unless urgent actions are taken.
The data presents a pathway based around three key levers. Lever 1 looks at the speed at which fossil fuel-powered cars need to be replaced by electric cars but points out that this alone will not be enough. A lot more work will be required for levers two and three:
- Increasing renewable energy in power grids
- Reducing greenhouse gas emissions in the manufacturing supply chain
Pulling just one or two levers in isolation, the report says, will be insufficient and only reduce the overshoot. Collective action from the motor industry is needed on all three levers, in parallel, and at a global level.
Fredrika Klarén, Polestar Head of Sustainability, says: “Car companies may be on different paths when it comes to brand, design, and business strategies, and some won’t even admit that the road to the future is electric. I believe it is, and that the climate crisis is a shared responsibility, and we must look beyond tailpipe emissions. This report makes clear the importance of acting now and together. There’s a clear cost to inaction, but there’s also a financial opportunity for innovators who find new answers to the challenges we face.”
Polestar says that Kearney’s report has been shared with several of the world’s leading car makers, together with an invitation to a roundtable held at the end of January to discuss areas of collective action. The aim is to find a path towards unprecedented, relevant and collective climate action for the car industry.
Anisa Costa, Rivian’s Chief Sustainability Officer, said: “The report’s findings are sobering. Our hope is that this report lays the groundwork for the automotive industry to collaborate in driving progress at the pace and scale we need – and ideally inspiring 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 and capital flows are shifting from traditional investment to sustainable investment, recognising an increasing link between sustainable transformation and financial benefits. In 2021, global sustainability investments totalled USD 35.3 trillion, representing over a third of all assets in five of the world’s biggest markets.
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