Ford is a publicly listed company headquartered in the USA. In 2020, it had USD 127 billion in group revenue and produced 3,242,000 light duty vehicles. Ford has limited low-carbon vehicle sales currently but has a detailed plan to increase electric vehicle sales and reduce emissions.
Ford has set a target to reduce its scope 1 and 2 emissions by 76% between 2017 and 2035. The Science Based Targets initiative (SBTi) has verified that this target is consistent with a 1.5°C pathway. The company has also set a science-based target to reduce its scope 3 emissions intensity by 50% by 2030 compared to 2017, which is consistent with a well-below 2 degrees pathway. This target applies to sales in the USA, EU, UK and China, covering 88% of total sales. The company should set a 1.5°C scope 3 target that covers all global sales when a 1.5°C SBTi pathway for the automotive sector becomes available.
Ford has a comprehensive transition plan, which includes plans to reduce emissions from manufacturing, vehicles and the supply chain. Measures include targeting 40-50% of global sales to be battery electric by 2030, increasing battery cell production capacity to 240 Gigawatt hours (GWh) by 2030, reaching 32% renewable electricity use in manufacturing plants by 2023 and 100% by 2035 and improving fuel economy of internal combustion engine vehicles. To achieve this, Ford has committed USD 11.5 billion in electrification by 2022 and USD 22 billion by 2025 to upgrade existing manufacturing facilities and open new electric vehicle and battery manufacturing facilities.
The average vehicle-in use emissions produced by vehicles sold by Ford increased from 113 grams of CO2 per passenger kilometre (gCO2/p.km) in 2015 to 123.2 gCO2/p.km in 2020. This contrasts with the company’s 1.5°C pathway, which requires substantial decreases in scope 3 emissions intensity, with the company expected to reach 52 gCO2/p.km by 2025. The increase between 2015 and 2020 is partly due to more accurate emissions testing from 2018 onwards. Additionally, the company has seen an increase in larger, less fuel-efficient internal combustion engine vehicles. Ford should take action to improve internal combustion engine fuel economy as well as scale low-carbon vehicle sales.
Ford’s sales of low-carbon vehicles have not significantly increased between 2015 and 2020. In 2015, 0.4% of Ford’s sales were low-carbon vehicles, decreasing to 0.2% in 2018 and 2019 and reaching 0.8% in 2020. This low share of low-carbon vehicles has hampered the company’s ability to reduce its scope 3 emissions intensity. The company is now being more ambitious with a target of 40-50% of global sales being electric vehicles by 2030. Ford should further increase its ambition, with its 1.5°C pathway expecting 64% of sales in 2030 to be low-carbon vehicles.
Ford is engaging with suppliers to encourage them to monitor their emissions impact and share best practice. Ford uses CDP’s supply chain programme to request emissions information and has established a supply chain sustainability programme Partnership for a Cleaner Environment (PACE) to share best practices with strategic suppliers. The company could go further by collaborating with suppliers or making purchasing commitments for low-carbon products like green steel for manufacturing vehicles. Additionally, it could request suppliers to set science-based targets to reduce emissions.
Ford was one of the few companies assessed which has a policy to review trade associations it is a member of positions on climate change. However, this review process could be strengthened to include the option to terminate membership of trade associations that oppose climate policy and to consider trade associations outside the USA. Currently, Ford is a member of at least seven trade associations that continue to oppose climate policy. This undermines the credibility of Ford’s stated public support for significant climate policies such as the Biden administration’s Build Back Better plan.
Ford receives a trend score of =. If the company were reassessed in the near future, its score would likely remain the same. Ford is projected to exceed its 1.5°C scope 3 carbon budget for 2020-2025 by 30%. However, it has set strong emissions targets and committed to reaching a 40-50% electric vehicle sales share by 2030. These commitments are supported by the company’s detailed transition plan and projected investment of USD 22 billion through to 2025 in electric vehicles. However, greater ambition, including a target of 64% of sales to be low-carbon by 2030, will be needed to align with its 1.5°C pathway.
Ford has set science-based targets to reduce its scope 1 and 2 emissions by 76% by 2035 and scope 3 vehicle in-use emissions by 50% per vehicle kilometre by 2035. It is aiming for 40-50% of its sales in 2030 to be from electric vehicles.
Ford is investing USD 22 billion in electrified vehicle development to 2025. The company is collaborating with SK Innovation to achieve a goal of 240 GWh of battery production capacity by 2030 and is aiming for a 40% reduction in battery pack cost by 2025.
Ford’s scope 3 emissions intensity increased from 112.8 grams CO2 per passenger kilometre (gCO2/p.km) in 2015 to 123.2 gCO2/p.km in 2020. It has reduced absolute scope 1 and 2 emissions by 24% from 2015 to 2020, however, this was partly due to lower production volumes, meaning Ford has not seen a significant decline in its scope 1 and 2 emissions intensity.
Ford’s strategy and targets suggest it is now committed to the low-carbon transition. However, the company’s limited progress in scaling low-carbon vehicle sales over recent years suggest it still has a significant way to go in translating commitment into action.
Just Transition Assessment
In this report, we present five key thematic findings showing how 180 companies can increase their ambition towards a transition to a low-carbon future that is just and equitable for the people and communities at risk of being affected by it.