Decarbonizing EV production: Overcoming Europe’s final hurdle in the pursuit of Net Zero
The electric vehicle, with a lower lifetime carbon footprint than a thermal vehicle, is an undisputedly pivotal lever for reducing the massive carbon footprint of mobility in Europe. Yet, it is far from a silver bullet as the impact of its production phase emissions remains quite significant.
In pursuit of its net zero targets, Europe finds itself fighting a battle on three fronts: accelerating electrification despite certain market dynamics, reducing the carbon footprint of vehicle production through innovation & regulation, and strengthening the industry’s competitiveness in the face of intensifying global competition.
To alleviate the impact of these challenges, Europe must ensure competitive access to low-carbon energy, reinforce the deployment of high-impact circular models, and simultaneously invest massively in R&D for new technologies and process innovations.
The automotive industry is witnessing the single biggest transformation in its history – the electrification of passenger and light commercial vehicles. This paradigm technological shift is a pivotal lever for low-carbon mobility across Europe, as an electric vehicle enables a 50-70% reduction of the lifetime carbon footprint compared to that of a thermal vehicle. However, while an electric vehicle emits much less carbon during its use phase than a thermal vehicle, its production phase can be more carbon intensive.
In its study "The Automotive industry's road to net zero: decarbonization path for Automotive production", Deloitte identifies four types of priority decarbonization levers and builds a realistic roadmap to enable the decarbonization of EV production in Europe while strengthening its competitiveness in an increasingly crowded market.
These decarbonization levers focus on the four main drivers of production-related emissions: batteries, aluminum, steel, and plastics. While access to low-carbon energy at a competitive cost is a prerequisite for the success of this decarbonization roadmap, other levers would require substantial investment – e.g., R&D and deployment of innovative production technologies and processes. Finally, the cost-effective implementation of closed-loop models at scale via cross-stakeholder partnerships and funding would serve as another crucial lever for decarbonizing production.
This study is part of a broader initiative led by Monitor Deloitte to identify tangible ways in which the automotive industry can reduce its environmental impact. It encompasses not only the decarbonization of production, but also the implementation of complementary circular business models. To learn more about the latter, please visit our dedicated report on the circular economy in the automotive industry.
