Why are companies failing to accelerate low-carbon sales?
A company’s investment in new battery technologies and electrification is a strong indication of its commitment to decarbonisation. The automotive industry’s low-carbon pathway cannot be met without auto manufacturers intentionally moving away from internal combustion engines towards low-carbon vehicles, namely plug-in hybrid and fully electric models. There has been a considerable increase in low-carbon vehicle sales in recent years, though companies in the assessment need to further accelerate their efforts to fill the gap between current trends and the industry’s pathway to achieve a well below 2 degree outcome.
Despite the majority of companies having a low-carbon vehicle option, the proportion of their total sales that come from these vehicles is very low. In 2017, 21 of the 25 companies had a low-carbon vehicle on the market. Only four companies – Mazda, Subaru, Suzuki and Tata Motors – did not sell any low-carbon vehicles that same year.
Some companies have already made exemplary efforts to increase their low-carbon vehicle sales. BAIC, for example, boosted its share of low-carbon vehicles sales from less than 1 percent of total annual sales in 2013 to reach 7 percent in 2017. Likewise, BMW grew its low-carbon vehicle sales from less than 1 percent in 2012 to nearly 6 percent in 2018.
However, many of the companies in the assessment are lagging behind, with low-carbon vehicles representing less than 1 percent of total annual sales for 16 companies. Several of the leading companies in the assessment – namely Groupe PSA, Renault and Volkswagen – are among this group. Groupe PSA and Volkswagen have already made quantified commitments to rapidly increase their low-carbon vehicle sales. Groupe PSA aims to have 50 percent of its sales come from electric vehicles by 2035. Likewise, Volkswagen intends to electrify 40 percent of its fleet by 2030. Other companies assessed also made commitments to increase their low-carbon vehicle sales to transition to a low-carbon economy.