Introduction

All industries face a significant challenge over the next decade if we are to meet the goals of the Paris Agreement, and automotive is no exception. Today, passenger vehicle emissions alone account for 15 percent of all greenhouse gas (GHG) emissions globally.^1,2 Recognizing this, the automotive industry has taken steps over the past decade to decarbonize. So far, the primary focus for the industry has rightly been on electrification of the fleet, targeting the significant portion (60 to 65 percent for internal combustion engine (ICE) vehicles) of emissions that come from the tailpipe.³

The challenge: when modeling a hypothetical well-to-wheel scenario of aggressive battery electric vehicle (BEV) adoption, powered by hypothetical full switch to fossil-free power sources in parallel, there is still a GHG emission overshoot, unless upstream scope 3 (supply chain emissions) are simultaneously tackled.⁴

This short report looks at well-to-wheel emissions of the projected passenger vehicle fleet globally to 2050, explores the monumental challenges the industry faces, and outlines a suite of actions that merit collective action. Detail on the modeled scenarios, methodology, data, and assumptions can be found in a longer version of this report.

Not a single year to lose

The remaining global emission budget is estimated by IEA to be approximately 500 GtCO₂-equivalent (GtCO₂e) before 2050 in order to stay below a 1.5-degree Celsius temperature increase.⁵Assuming passenger vehicles maintain an equal share of global emissions (~15 percent, considering total life cycle emissions), this would equate to approximately 75 to 80 Gt of total emissions left for the industry. At the current trajectory this budget will be reached by 2035, which would equate to an overshoot of 75 percent in 2050, based on ICCT optimistic projections (our baseline case)—or larger when applying conservative assumptions.

The numbers above are rightly debated; this is a complex topic. What share of the remaining GHG budget should “passenger vehicles” take? Will efficiency advances in the combustion engine sufficiently drive GHG reduction? What about the energy crisis, the price and efficiency of fossil-free power sources, raw material availability, battery efficiency, and technology yet to be developed?⁶ Will different regions transition at a different pace? To support this discussion, scenarios and sensitivity analysis are included in the longer version of this report.

However, whichever way it is modeled, the pathway to 1.5 degrees for the passenger vehicle industry is tight. Few reports project a scenario that is achievable without accelerated action. Certainly, the trajectory is too close for comfort. Every year that passes eats up approximately 7 percent of the GHG budget in the baseline trajectory, implying greater subsequent effort and capital requirements just to play catch-up and amplifying the cost to adjust each year (see figure 1).

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