The World Benchmarking Alliance’s (WBA) latest Automotive and Transportation Manufacturers Benchmark, published today, reveals that the majority of global car manufacturers are not financially committed to investing in electrification and low-carbon business models, despite having the technological advances and political support on their side.

Car manufacturers: not walking the walk

The assessed companies, who between them produce eight out of every 10 cars sold globally and include Mercedes, Ford and Nissan, are still tied to soon-to-be outdated business models. Across these automotive manufacturers, only 17% of revenue is attributed to low-carbon sales.

Not a single legacy manufacturer is committed to phasing out fossil fuels by 2035 and only six companies (Hyundai, Kia, Renault, Stellantis, General Motors and Ford) pledged full electrification in specific markets. Only 23% of companies have a clear pledge to increase future expenditure on low-carbon technology.

Encouragingly, 60% of assessed companies scored over 55 out of 100 on elements of their transition planning, suggesting that, while action is still limited, manufacturers have mapped out what low-carbon pathways might look like.

The stark reality

Vicky Sins, World Benchmarking Alliance’s Decarbonisation and Energy Transformation Lead, said:

Our research reveals a stark reality: most manufacturers remain anchored to outdated business models that jeopardise their ability to meet these critical climate targets. While there are promising signs of transition planning on paper, real progress hinges on tangible actions – such as phasing out fossil fuel vehicles, investing heavily in low-carbon technology, and securing sustainable supply chains.

If the automotive industry is to accelerate meaningful progress toward a 1.5°C future, it must unconditionally commit to business models that scale electrification globally. Far too many companies are stuck in first gear.

The research highlights that leading automotive manufacturers must urgently address decarbonisation within their supply chains, particularly battery production.

Only two companies, BMW and Kia, require suppliers to meet 1.5°C-aligned emissions goals, and none have specific targets for battery suppliers, a major source of upstream emissions and a key contributor to the automotive sector’s total emissions.

However, WBA found that this may improve in the future.

Hope on the horizon?

Eleven assessed companies, including Volkswagen and BYD, covering 60% of the global EV market, are moving to in-house battery production, potentially boosting decarbonisation efforts.

WBA’s new research found the 30 automotive companies assessed are far behind where they need to be on key social indicators to deliver a just transition. Only five manufacturers (Ford, Mercedes Benz, Renault, Stellantis and Suzuki are committed to engaging in social dialogue and negotiating with workers about what the future should look like.

In addition, only 10% of companies even disclose the stakeholders they engage with on the road to a just transition, leaving nearly three million workers and affected stakeholders without a voice or ability to contribute to the discussion.

Sins added:

Decarbonisation alone is not enough. With automotive factories continuing to close, from Vauxhall’s Luton plant in the UK to VW potentially closing three factories in Germany, the automotive sector must ensure that decarbonisation is not used as an excuse for an unjust  transition, and that it meets the needs of workers and other affected communities. These businesses need to do more to leverage social dialogue and engage with workers and affected stakeholders in order to achieve a just transition.

Featured image via the Canary

By The Canary

This post was originally published on Canary.