Tesla

Tesla has significantly reduced its scope 1 and 2 emissions intensity by approximately 41% from 2021 to 2023. This reduction exceeded the company’s 1.5°C pathway. Furthermore, since its founding Tesla has only sold EVs and therefore has no tailpipe emissions. This means the company has avoided creating the largest source of emissions associated with road vehicles. 

Tesla is proactively advancing business models for a low-carbon future. Alongside exclusively producing electric light-duty vehicles (LDVs), the company manufactures its batteries in-house at its facilities in Lathrop, in California, and Texas. In 2023, Tesla deployed nearly 15 gigawatt-hours (GWh) of energy storage, generating approximately USD 1.1 billion in revenue, with its capacity expected to reach 40 GWh following the opening of the Lathrop Megafactory. Tesla also operates the Supercharger network, currently the largest of its kind in the world.

Tesla dedicates 100% of its research and development (R&D) spending and planned capital expenditure (CapEx) for 2023-2025 to low-carbon technologies. The company’s revenue is generated exclusively from EV sales, placing it well ahead of the industry target for automakers to reach 100% EV sales by 2035. Furthermore, Tesla has no locked-in emissions associated with its sold products. The average energy efficiency of battery electric vehicles (BEV) sold by the company in 2023 ranged between 3.8 and 4.1 miles per kilowatt-hour (kWh).

No leading practices were identified for this company.

Despite its low-carbon commitment, Tesla has yet to set a 1.5°C-aligned science-based target for its scope 1 and 2 emissions. Furthermore, the company has an opportunity to report emissions volumes for its purchased materials to allow for an assessment of the trend in its past upstream scope 3 emissions intensity.

Tesla needs to develop a plan to decarbonise its upstream scope 3 emissions, which accounted for 80% of its total scope 3 emissions in 2023.

No risks and opportunities were identified for the company.

Although Tesla has implemented a supplier engagement strategy, it does not specifically include quantified greenhouse gas (GHG) emissions reduction requirements for suppliers. Creating quantified targets will provide clearer direction to the company’s whole supply chain. The company can go further by encouraging more of its suppliers to set science-based targets or making purchase commitments for low-carbon products. Notably, Tesla does not have a publicly available policy to manage engagement with trade associations on climate change issues.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. 

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s actions to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the actions it takes to provide reskilling and upskilling opportunities for workers and affected stakeholders. For instance, it offers the Tesla START training program, the Manufacturing Development Program, the Future Talent Program and apprenticeships, and it partners with regional institutions for workforce development in lithium sourcing. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. However, no evidence was found of the company’s process to identify and mitigate salient human rights risks in its own operations and its supply chain. The company reports having engaged with stakeholders whose human rights may have been impacted by its activities. It also has a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. However, no evidence was found of the company having a time-bound target for paying all workers a living wage. The company does not disclose the proportion of its direct workforce covered by collective bargaining agreements. Further, no relevant disclosure was found of the company’s required working hours for its own workers, but the company has a public expectation that its business relationships shall not require workers to work more than 48 hours in a regular work week or 60 hours including overtime. The company discloses some indicators of workforce diversity, including the race and ethnicity by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. Furthermore, no evidence found that the company has a commitment towards gender equality and women’s empowerment. 

The company commits to personal data protection, and it has policies to prohibit bribery and corruption, and ensure responsible tax practices and responsible lobbying and political engagement. However, the company can strengthen its disclosure on these subjects.