Customers, investors, and employees in the automotive industry are demanding more sustainable practices – this has caused manufacturers to invest more intuitive technology into vehicles as well as consider alternative fuel models.
However, as more powertrains electrify, realizing decarbonization requires going beyond simply reducing emissions from use phase activities; it requires taking into account materials production as well as sustainable manufacturing processes to get there.
Design Considerations
Before the Industrial Revolution, human travel had minimal effects on Earth’s climate. Now however, fossil fuel use to power trains, boats, cars, and trucks accounts for one-fourth of global carbon dioxide emissions which contributes directly to air pollution that harms human health and reduces property values, as well as contributing to global warming.
Government regulations and consumer demand for eco-friendly cars is pushing automotive companies towards sustainable practices. Companies must consider weight, horsepower and vehicle footprint when designing new models to comply with fuel efficiency and emissions standards. Investors are increasingly scrutinizing automakers’ sustainability efforts when assessing corporate credit risk. Customers expect companies to quickly adjust production capacity and rework supply chains in response to the shift toward electric vehicle (EV) sales, whether that takes the form of static production at its historical growth rate, or adaptive growth where volumes increase proportionately to maintain overall market share.
Energy Efficiency
Automotive companies must adapt to changing customer, investor and employee expectations as expectations shift in terms of customers, investors and employees alike. More specifically, manufacturers must focus on sustainable production methods and alternative fuel models in order to reduce carbon emissions and their carbon footprints.
Auto manufacturers can reduce energy usage by employing energy-saving manufacturing techniques and using recyclable materials in production processes. They can also encourage green driving habits, such as maintaining proper tire pressure and limiting unnecessary idling time on their roads.
Energetically, they can reduce energy use when manufacturing vehicles by employing advanced manufacturing technologies like additive and 3D printing. These methods allow for precise, customizable production that minimizes material waste while simultaneously cutting energy consumption from raw material extraction through assembly line operation. By limiting the number of parts and components that go into a car, manufacturers can also decrease overall weight and emissions; increased mass and horsepower tend to lead to greater CO2 emissions while decreased mass and size improve fuel economy and environmental performance.
Materials
Increased pressure from consumers, investors and employees is prompting automotive companies to become more environmentally conscious. This trend bodes well for the industry; more organizations are adopting sustainable practices for both the sake of the environment and themselves.
Emissions from vehicles are one of the main contributors to global warming, emitting pollutants such as particulate matter, volatile organic compounds and greenhouse gases like carbon dioxide into the environment. These emissions may lead to health issues as well as increase utility bills, reduce home insurance premiums and even cause property damage.
Auto manufacturers are making strides toward increasing the use of secondary raw materials and green energy sources to minimize their environmental footprint, as well as decreasing water use to limit production process waste – up to 151 cubic meters can be required per car produced! Companies that grow EV volumes slowly or have poorer financial health than peers face increased credit risks when transitioning to climate-friendly economies.
Design Trends
By design or necessity, automakers are swiftly moving into an era of mobility and sustainability. Traditional assembly-line production processes consume vast quantities of energy, metals, plastics and toxins that leave behind an immense carbon footprint.
Vehicle emissions also contribute to air pollution, leading to direct economic consequences such as increased health care costs and maintenance expenses, plus property loss due to extreme weather events. Emissions also have negative repercussions for personal finances resulting in lower home values and higher utility bills.
Major investors want car manufacturers to accelerate their preparations for a low-carbon world, demanding these companies hire climate change specialists on their boards, engage more closely with international policymakers, and invest more heavily in low-emission cars. Their demands have been driven by innovators like California-based Tesla who advocate climate change while producing electric vehicles; its financial performance and credit risk depend on two variables – physical location risk as well as transition risk between electric and non-electric production models.
