Automakers' Sustainability Efforts Face Challenges in Tackling Tailpipe Emissions

Automobile manufacturers are increasingly utilizing renewable energy and urging their suppliers to reduce emissions to lower their carbon footprint. However, the biggest hurdle lies in addressing the tailpipe emissions from the vehicles they sell. Automakers are leveraging their vast manufacturing sites by deploying solar panels to generate renewable energy, signing power purchase agreements with third-party renewable energy providers, and promoting the use of railways to reduce logistics-related emissions.

The adoption of cleaner vehicle technologies like EVs or hydrogen fuel cell vehicles is seen as a necessary step to transition to zero tailpipe emissions. While automakers are making strides in reducing emissions, the focus should be on addressing the tailpipe emissions, which account for a significant portion of a company's carbon footprint. The broader impacts of EVs, including the emissions from manufacturing and supply chains, also pose a challenge. Despite these complexities, the shift towards sustainable practices in the automotive industry is underway in India, with a decline in fossil fuel-based power plants and an increase in renewable energy capacity.

Key Takeaways:

• Maruti Suzuki has scaled up captive solar power generation from 1 MW to 26 MW, and is also increasing use of railways to reduce logistics-related emissions.
• Mahindra and Mahindra has implemented an internal carbon price of $10 per ton of CO2 when making business decisions, ensuring that less expensive but more polluting options do not trump cleaner but more expensive alternatives.
• Over 75% of Volkswagen AG's greenhouse gas emissions come from the tailpipe of vehicles they sell, while Daimler reported that about 80% of its emissions in 2020 came from the use phase of vehicles it sold.
• Tata Motors has transitioned to cleaner vehicle technologies like EVs, with about 5% of its sales coming from electric vehicles, and plans to invest over ₹10,000 crore in Gujarat to set up production capacity for EVs.
• Automakers are unlikely to transition completely to zero tailpipe emissions in the near future, with most companies opting for hybrid or partial electrification.
• The carbon footprint of manufacturing an EV can be higher than manufacturing a combustion engine vehicle due to the materials used in batteries.

Statistics:

• Maruti Suzuki has scaled up captive solar power generation from 1 MW to 26 MW.
• Mahindra and Mahindra has fixed an internal carbon price of $10 per ton of CO2 when making business decisions.
• 75% of Volkswagen AG's greenhouse gas emissions come from the tailpipe of vehicles they sell.
• 80% of Daimler's emissions in 2020 came from the use phase of vehicles it sold.
• 5% of Tata Motors' sales come from electric vehicles.
• ₹10,000 crore is the planned investment by Tata Motors in Gujarat to set up production capacity for EVs.
• 60% of installed electricity generation capacity in India comes from fossil fuel-based power plants, down from 70% five years ago.

Sources:

• Volkswagen AG's sustainability report 2021
• Daimler's 2020 sustainability report
• Tata Motors' press release on investment in Gujarat
• Mahindra and Mahindra's statement on internal carbon pricing
• Maruti Suzuki's corporate affairs statement
• Greenhouse Gas Protocol (an internationally recognized framework to measure emissions)