With the escalating climate crisis posing an existential threat to car companies, the conversion to BEVs is about more than just saving the planet, it's about saving carmakers themselves
You would have thought that those culpable of the climate and ecological crisis would at least feel some sense of responsibility, or even an amount of guilt. Of course, the internal combustion engine (ICE) that pollutes the planet with damaging carbon emissions thrusts the entire car industry rather ignominiously into that category. With an unwanted reputation as reprobates, you would think that carmakers would be keen to make amends, and clean up public perceptions of their brands.
After all, humans are the custodians of the planet. So surely, it’s in the best interests of car companies to convert to the sustainable business model of making battery electric vehicles (BEV) that protect and preserve the planet humans are reliant on to survive. It’s not as if there’s another inhabitable planet ready and waiting for humans can transfer to once this one’s destroyed. Besides, you can’t manufacture cars if there’s no people to purchase them, because there’s no hospitable planet to live on, can you? It’s a rhetorical question.
As it turns out, humanity is the destroyer of the planet. It’s the earth that needs saving from people, which really is genuinely quite astonishing when you think about it. Thankfully, there are members of the human race that understand, and more importantly, care about this situation. Humanity has to implement sustainable solutions to save itself from extinction. People are part of the planet, as opposed to separate from it.
As a key contributor to this worldwide problem, it puts an extra burden on carmakers. However, that means they can play a crucial role in being part of the solution. In Europe, or specifically the European Union, the 27 member countries enacted 2020/21 carbon dioxide standards for the car industry as part of the blocs Green Deal. Carmakers who fail to cut emissions to meet EU targets are fined. This has accelerated the rate of development by companies in low-emission technology as they switch to BEVs.
It shows that car companies are still beholden to legislative leverage compared to voluntary commitments. Oh, the car industry talks the talk for PR purposes, but behind the fatuous rhetoric, the reality is tantamount to greenwashing – the practice of appearing environmentally responsible with words and gestures to promote a good public image, yet it's not backed up with meaningful action, and is anything but. It’s a rather cynical form of manipulation to deflect scrutiny, rather than deal with the issue at hand.
"The further down the readiness table a carmaker resides, the less aspirational and strategic they currently are about BEVs"
With carbon dioxide targets set to be tightened even further from 2027, it raises question about how seriously carmakers in the EU27 really are about converting to BEVs. A report by Transport & Environment called Promises, but no plans has sought to shed light on the readiness of carmakers by assessing companies ambitions via 2020 BEV sales, production forecasts and phase-out commitments. The research also considers the strategies carmakers are adopting to meet the promises pitched via battery manufacturing, charging infrastructure and BEV platforms. The results are scored out of 100.
The findings are compared with the role that regulation is having on transforming the car industry. For the 2035 end date of the ICE to be met, BEVs must make up 22% market share in 2025, 37% in 2027 and 67% in 2030 in order for the EU to meet its Green Deal obligations to become carbon neutral by 2050. It’s a steep trajectory with no real room for slippage. Complacency cannot be tolerated, and compromise is not an option.
For the majority of carmakers however, the results make for disappointing but unsurprising disclosure. In terms of electric car ambition and strategy, Volvo and Volkswagen are exceptions. Both are joint top of the table scoring 70/100 and are the best prepared carmakers leading the electric transformation in the car industry. While Volvo scores well for ambition, Volkswagen scores best for strategy and is the most advanced car company in the BEV conversion phase in the EU.
Ranked just below is Renault with a score of 57/100. The company has good intentions and an idea how to convert to making BEVs. But it’s not as comprehensive as the top two. Hyundai and Kia are next in midtable scoring 52/100. The duo has laudable ambitions but lack the watertight plan to achieve them. Ford are similar, but score 47/100. Actions always speak louder than words. And the further down the readiness table a carmaker resides, the less aspirational and strategic they currently are about BEVs. Stellantis for example, show only piecemeal measures, scoring 46/100.
Understandably though, carmakers towards the bottom of the table are the greatest cause of concern. And there’s some big names which do rattle the cage somewhat. Daimler score just 46/100, BMW score only 44/100 while Jaguar Land Rover score 42/100. All have inadequate roadmaps to electrification that are unsuitable to meet the target dates during the phaseout period of the ICE. While Toyota are ranked worst of all in last place, scoring just 35/100, having once been considered a frontrunner in low-emission technology a decade previous.
"The climate crisis is an existential wakeup call for the car industry. There is no law of nature that says carmakers are immortal"
But what does this mean for the car industry? For carmakers like Volvo and VW who are serious about restructuring their business models for manufacturing cars, their survival is more certain and assured. It puts them in a strong position to thrive from the recognition that the change required is in response to a problem that they themselves have contributed to. The climate crisis is an existential wakeup call for the car industry. There is no law of nature that says carmakers are immortal.
For the carmakers that seem to be complacent, like Toyota, Jaguar Land Rover, BMW, Daimler and Stellantis, the research from the report should serve as a wakeup call, and make them reconsider their priorities. The trouble with car companies reacting far too late to the electric, digital and autonomous era that’s looming larger and larger day by day is that it sets them back on the research and development curve long-term. For the carmakers vacillating, it throws a spanner in the works as other more advanced carmakers will capitalise on their comparative advantage.
Those car companies lagging behind in the transitional process from the ICE to BEVs need to step up to the plate sooner rather than later, as their own survival is dependent on it. That’s ultimately what’s at stake. There are legitimate interests with the car industry in the EU and with the escalating climate crisis that need to be reconciled. And so, the longer the inevitable conversion is delayed, the higher the odds are stacked against the favour of laggard car companies surviving at all.
Yet the track record for idling carmakers changing on their own accord is not that convincing. Indeed, evidence indicates that the onus will be on legislators to force straggling carmakers to act. The report lists recommendations for implementation so that the EU car industry can be brought right in line with targets contained within the EU Green Deal. These should be enacted with great haste.
With Volvo and VW, the only carmakers set to electrify and meet the targets on time right now, it makes for a less than certain and assured outlook for the rest in the EU car industry. Because a significant number of them can’t be relied upon to convert to BEVs, and save themselves from extinction, regulation is the only option that's left. And that really is the most damning part of it all.
Photo: Volkswagen
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