2020 Measurement area finding

Sold product performance

Module 4, sold product performance, assesses the most significant emissions from the automotive sector, which occur when vehicles are being driven, i.e., when diesel or petrol (gasoline) is burned in internal combustion engine (ICE) vehicles. It is, therefore, critically important for the sector to transition away from fossil fuel engines to low-carbon vehicles, such as full battery electric, fuel cell or plug-in hybrid vehicles.

Therefore indicator 4.3 measures the share of low-carbon vehicles in each company’s overall vehicle sales. It is also key that auto manufacturers improve the fuel efficiency of remaining ICE vehicles, i.e., increase the passenger kilometres travelled per litre of fuel, as assessed by indicator 4.4. Together, these changes reduce the amount of greenhouse gas emissions per passenger kilometre travelled (assessed in indicator 4.1) and reduce the volume of emissions locked-in from ongoing vehicle sales (assessed in indicator 4.2). Module 4 is therefore the most highly weighted performance module in an ACT assessment, accounting for 7 out of the overall performance assessment score of 20.

Across the 30 keystone companies assessed this year, the low-carbon transition alignment for this module varies considerably. For example:

  • The two top performers show full alignment – Tesla and BYD.
  • The two weakest performers show less than 20 percent alignment – Mazda and FCA.

Out of the 25 companies assessed in the 2019 Benchmark, only Tesla looked likely to outperform its company decarbonisation pathway for low-carbon vehicle share of sales over the next five years. In fact, in this year’s assessment, three of the six previously fully aligned companies – Tesla, BAIC and Guangzhou Automobile – remain aligned with a well below 2-degree pathway. The other three – BMW, Geely and FAW – did all increase their low-carbon vehicle share but not fast enough.

However, low-carbon vehicles account for less than 0.5 percent of sales for these six companies*:

  • Fiat Chrysler
  • Honda
  • Mahindra & Mahindra
  • Mazda
  • Subaru
  • Suzuki

Of these, only Honda has shifted its non-ICE sales significantly, but towards conventional hybrids which are not considered to be low-carbon vehicles (they operate on fossil fuel energy sources for the majority of their use). Combined sales of conventional and plug-in hybrids make up 5.6 percent of Honda’s sales in 2019. This proportion has hardly changed over the last 5 years, showing insufficient action.

Only ten of the companies assessed both in 2020 and in the 2019 Benchmark have increased the rate of reductions in their overall vehicle in-use emissions intensity over the five-year assessment period (excluding Tesla, which only manufactures battery electric vehicles). For four of the companies in this year’s assessment – Fiat Chrysler, Renault, Mazda and Subaru – the emissions intensity trend actually increased. This correlates with the trend towards higher proportions of larger, heavier vehicles in their sales:

  • Fiat Chrysler increased the share of light trucks, vans and SUVs in its sales from 48 percent to 62 percent between 2014 and 2019.
  • The proportion of light trucks and SUVs in Renault’s sales mix increased from 19 percent to 28 percent over the same period and within the car mix, the share of SUV-type vehicles also increased from 18 to 28 percent.
  • Mazda and Subaru show similar mix changes.

Only ten companies have projections for cumulative vehicle in-use emissions that remain within their emissions budget. Worryingly, only three companies – Changan, Ford and General Motors – have improved alignment with their emissions budgets since the previous assessment. Locked-in emissions alignment has worsened for 15 companies and two weak performers – Mazda and Fiat Chrysler – are even projected to exceed their budgets by more than 50 percent.

Overall, 28 of the 30 keystone companies in this assessment are not yet doing enough to reduce the emissions from their vehicles when they are driven. Instead of accelerating towards a future low-carbon economy, the assessment results for this module indicate that the gap between where companies are headed and where they need to be is widening – and will continue to do so as we approach 2050, and as ambition tightens towards 1.5 degrees under the Paris Agreement.

*Technical notes:

Most recent sales data is from 2019.

Companies’ cumulative in-use emissions budgets over the coming five years are calculated starting from their emissions intensities in the reporting year of 2019.

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