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McKinsey & Company: The zero-carbon car: Abating material emissions is next on the agenda

The automotive industry could abate 66 percent of emissions from their material production at no extra cost by 2030—if industry participants work together and start now

The automotive sector is critical to achieving net-zero global emissions by 2050, the foundation of the road map toward limiting global warming to 1.5 degrees Celsius above preindustrial levels. Many original-equipment manufacturers (OEMs) are accordingly setting aggressive decarbonization targets to meet this challenge.1

Since 65 to 80 percent of emissions an automobile generates are from tailpipe emissions,2 and corresponding indirect emissions come from fuel supply, the industry has understandably focused on electrifying powertrains. However, to reach the full potential of automotive decarbonization—and achieve the zero-carbon car—industry players now must turn their attention to material emissions as well (Exhibit 1).

As tailpipe emissions decrease, emissions from vehicles’ will increase both absolutely and relatively and soon become a larger share of life-cycle emissions. We estimate that the growing market share of battery electric vehicles that have higher baseline material emissions—and the changing energy mix required to power them—will boost material emissions from 18 percent of vehicles’ life-cycle emissions today to more than 60 percent by 2040 (Exhibit 2). This jump presents both a challenge and an opportunity on the path to the zero-carbon car.

Exhibit 2

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SOURCE: McKinsey & Company

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