Insights: Why it’s time to drive decarbonisation across the auto industry

The world finds itself in a situation where conflict, high inflation and politics threaten to overshadow the debate about how to stop climate change and speed up the shift to a decarbonised industry.

That gives COP28 – despite all the predictable criticism of the gathering – actual importance. Here in Dubai, we see where progress is being made and where it isn’t, with the global stocktake, for the first time since the Paris Agreement was adopted in 2015.

It is a time for honest facts to drive collective action from industry and regulators.

Passenger cars account for about 15 per cent of all global greenhouse gas (GHG) emissions. This means that our industry has a very important role to play in living up to the Paris Agreement. As a design- and performance-led EV company, we offer customers the most attractive possible alternatives to internal combustion engine cars. But we also need politicians and regulators to do more to facilitate this transition.

Three areas to aid decarbonisation

We believe that there are three main areas in which support from regulators can help speed up our industry’s path to decarbonisation.

The first area is to accelerate the transition to battery electric vehicles (BEVs). While future technologies like various forms of fuel cells show potential for eliminating tailpipe emissions, BEVs can be deployed at mass, today, providing an immediate positive impact.

To stay on the 1.5-degree pathway for 2050, we have to stop selling fossil fuel cars by 2032 and this means transitioning to BEVs.

Regulators and governments must do more to support this transition. It’s not just about subsidies to stimulate car sales, but rather making owning an electric car more attractive, like facilitating a faster development of charging infrastructure and, ultimately, putting a price on CO2.

Emitting is, simply put, not expensive enough.

Shift to green energy

The second area is to speed up the shift to green energy, from the current global average of 39 percent fossil-free electricity to 100 per cent by 2033. By helping to phase out fossil-based energy, regulators can help reduce the use-phase emissions from the growing proportion of electric vehicles on our roads.

Achieving our ambitions in these two areas would result in a reduction of our industry’s emission overshoot to 2050, decreasing it from 50 per cent to 25 per cent.

As we move from ICE cars to EVs, the main share of the carbon footprint will move from products in use to the supply chain, which is the third area that we need to tackle.

Currently, supply chain emissions for an EV are about 35 to 50 per cent higher than for ICEs, primarily due to additional emissions related to the battery.

To remain aligned with the Paris agreement, our industry has to reduce greenhouse gas in the manufacturing and supply chain by 81 per cent by 2032.

Changing course is demanding but we need to move faster to remain within the 1.5-degree limit.

For the past three years, we have been advocating for the adoption of a common life cycle assessment methodology across the industry. Such collective action would serve as a global standard and help customers make more informed decisions.

With each model we release, we disclose the car’s cradle-to-gate carbon footprint.

We have also developed bi-directional charging capabilities – making it possible for EVs to provide support to strained electricity grids during peak times and only charging during off-peak times.

The technology is here and ready to be used, but it requires regulators to enable it for consumers.

While much work lies ahead, our commitment is clear: at COP28 and beyond, we intend to extend an invitation to collaborate in every meeting we attend – to make things happen. We cannot afford to wait any longer.

The writer is the CEO of Polestar.