Growing Trends in achieving Environmental Sustainability in the Automotive Sector:
Current trends in the automotive industry focus on zero emission vehicles such as the Electric vehicles (EVs) and environmentally sustainable manufacturing practices to offset climate change. In 2022 alone, EV car models recorded a strong increase in sales compared to 2021 according to an IEA (International Energy Agency) study. At the same time, global car markets witnessed sales growth in Sports Utility Vehicles (SUVs) leading to an estimated CO2 emission of 1 billion tonnes.
Concerned by environmental implications and the growing sales of SUVs since 2015, various stakeholder groups have increased pressure on global car markets to transition to environmentally-friendly manufacturing practices in the industry. Regulators, financial institutions, governments, and public interest groups call for several sustainable practices, including restricting the manufacturing and production of vehicles running on fossil-fuels, promoting sustainable manufacturing methods, and promoting circular economy in design and manufacturing. Some of the key trends and developments are discussed below.
- Electric Vehicles: EV’s are one of the key technologies for driving decarbonization in the automotive industry (mainly the road transport sector) as they emit fewer GHG emissions compared to conventional internal combustion engine vehicles. The IEA’s estimates show that in 2016 there were fewer than one million EVs on road across China, Europe, and the U.S. As of 2023, this number has reached more than 13 million, globally. China, U.S., and Europe continue to dominate the EV market in terms of sales. Innovation-wise, alternative battery chemistries, such as lithium-iron phosphate batteries and sodium-ion batteries are gaining prominence, alongside the existing lithium-ion chemistry. While global investment and policy to support EV infrastructure deployment is increasing, marked improvement in the deployment of publicly accessible EV charging stations is lacking. However, the trend in adoption of EV’s has led to the prevention of emissions growth according to IEA reports in 2023.
- Adoption of Renewable Energy Sources in Manufacturing and Operations: Grappling with mounting pressure from stakeholder groups, the automotive industry has hastened the adoption of renewable energy technologies across its manufacturing and operations. On a design and operational front, renewable energy plays a key role in Research & Development. For instance, Volkswagen uses renewable raw materials in its operations including natural fibers, wood, and cellulose for manufacturing its components, whereas in terms of operations, all of BMW Group’s facilities worldwide run on 100% green energy (sourced) as of 2024. On the other hand, EV batteries are potentially considered to make renewable energy economical by acting as storage grid batteries at the end of their life cycle, preventing the accumulation of toxic chemical waste.
- Circular Economy Practices: To conserve resources and promote sustainability throughout the entire life cycle of a vehicle, automotive manufacturers are moving away from the traditional linear model of “take-make-dispose” and embracing a more sustainable and circular approach. In this process, material demand and waste generation are reduced as components are manufactured to be reclaimed or recycled and additionally makes EVs more sustainable. Practices in trend include being modular in vehicle design (using interchangeable components for manufacturing) and using speculative product (building a product based on order) can reduce waste generation and save production costs for these firms.
- Sustainable Internal Combustion Fuels: Another key trend gaining traction is the use of renewable energy sources for combustion, comprising of sustainable fuels. Biofuels made from organic materials such as crops, agricultural residues, or algae, are considered sustainable since the plants used for biofuel production absorb carbon dioxide during growth and thereby help offset emissions when these fuels are burned. In addition, synthetic fuels are produced by using renewable energy to synthesize hydrocarbons or other fuel components. These fuels can be used in existing internal combustion engines and offer the potential for low carbon emissions. Hydrogen Fuel Cell Vehicles (HFCVs) are popularized for being eco-friendly and efficient compared to traditional fossil-fuel powered vehicles; however, technical and infrastructural challenges such as durability issues and lack of hydrogen refueling infrastructure prevent them from becoming a powerful alternative for sustainable transportation.
- Emission Reduction Technologies: To create a more sustainable automotive product, automotive manufacturers are investing in technologies like hydrogen fuel cells and plug-in hybrid systems to reduce emissions and improve fuel efficiency. As discussed earlier, high costs of EV are one of the challenges for resistance to adoption of EVs, particularly in the Asian region. As a solution, hybrid systems use several advanced technologies such as regenerative braking and electric motor drive, that supplement the traditional internal combustion engine through reducing the load, thereby reducing emissions. In 2023, the Indian passenger vehicle market has launched a few hybrid cars including the Toyota Innova Hycross, Toyota Urban Cruiser, and Maruti Suzuki Grand Vitara that promote environmental-friendly passenger transportation.
What Lies ahead for the Automotive Industry in the Transition to a Green Future?
Adopting sustainable solutions (the switch to EVs and using advanced, fuel-efficient technologies) on a large scale might take time as these solutions are continued to be backed by ongoing research and development efforts. Developing an efficient charging infrastructure for EVs, promoting the widespread adoption of EVs, and developing high-capacity, long-lasting, and affordable battery technology are crucial aspects which might take time and is lacking in the current market scenario. In terms of the consideration of alternative fuel such as HFCVs, improving the efficiency and reducing the cost of fuel cell systems remains a challenging due to the less energy generated per unit volume of hydrogen compared to conventional fuel. In addition, other factors like transportation and end user proximity might add as a challenge to achieve efficiency of operations.
In the quest for transitioning to a green economy and reducing the negative environmental impact, the automotive industry is at a crucial juncture where it must balance economic significance with the imperative of environmental sustainability. However, this comes with significant challenges such as setting up fleet emissions targets and setting up recycling targets to make impactful transformations in line with the above discussed trends. Meeting these challenges will require substantial technological innovation, collaboration, and a commitment to transition to greener and sustainable practices to positively counter the fight against climate change.
