The top 15 traditional carmakers saw a 47% growth in zero-emission electric vehicle sales between 2021 and 2022, lagging behind the global growth rate of 69% for the same period

As we approach the Conference of Parties (COP28) in Dubai, the cry for environment protection and sustainability is getting louder. More and more people are calling for nations to outline decisive measures to contain the fallout of climate change – one of the biggest challenges facing humanity in this century. A big factor worsening climate change events is anthropogenic emissions and the transportation sector forms a big part of this pollution. Consequently, the demand to decarbonise the automobile industry is justifiably getting stronger.

To achieve this mammoth task, policymakers appear to have reposed their faith in popularising electric vehicles, which have zero tail-pipe emissions. The transition has begun and it has found initial success. However, the EV market still needs to grow rapidly to reduce the pace of environmental degradation due to internal combustion engine (ICE) vehicles.

Recent reports suggest transition efforts by traditional automobile players may not be up to the mark. According to a report by Greenpeace, a global environmental group, the world’s 15 largest traditional automakers sold 3.3 million zero-emission electric vehicles (ZEVs) in 2022, compared to 55.5 million ICE vehicles. ICE vehicles accounted for 94.4% of total vehicles sold by these automakers in 2022, compared to 99.5% in 2018. This suggests EVs are closing the gap with ICE vehicles but not fast enough to become an alternative in any serious manner.

The traditional automakers continue to sell high volumes of ICE vehicles in the Global South, which perpetuates fossil fuel consumption and is inconsistent with the automakers’ climate commitments.

Fig 1. Global ZEV sales and ZEV sales by 15 major traditional automakers. Image source: Greenpeace report

Think of it for a minute. While the rest of the industry has progressed towards electrification, the traditional automakers remain focused on selling ICE vehicles. These 15 carmakers saw a 47% growth in ZEV sales between 2021 and 2022, lagging behind the global growth rate of 69% for the same period.

Breaking down the numbers further suggests the traditional automakers have failed to substantially increase ZEV sales outside China and Europe, where they have benefited from government incentives, according to the report. The 15 largest traditional automakers accounted for 74% of global auto market share in 2022, but their ZEV market share the same year was just 43%.

How are traditional carmakers placed?

  • Mercedes-Benz and BMW are the top scorers in this year’s transition ranking by Greenpeace, but their rate of increasing ZEV sales and phasing out ICE vehicles is not in line with limiting the global average temperature increase to 1.5 degrees Celsius as outlined in the 2015 Paris Agreement. The companies’ ZEV production capacity is insufficient and trails far behind EV-focused carmakers such as the Elon Musk-led Tesla and the Chinese giant BYD, it said.

    Fig 2. Global sales of ZEVs as a percentage of total sales by company in 2021 and 2022. Image source: Greenpeace report

  • Fewer than one in 400 vehicles sold by Toyota in 2022 were ZEVs, and the Japanese automaker has not improved on its commitment to phase out ICE vehicles since 2021. Meanwhile, in 2022, its domestic rival Honda showed a stronger increase in ZEV sales as a percentage, while Nissan committed to the phase-out of ICE vehicles sales in Europe by 2030.
  • Volkswagen, Stellantis, and Renault have increased their ZEV sales, but not as rapidly as some of their rivals, the report said.
  • Ford’s ZEV growth is an improvement but its ZEV sales figures remain low. In 2022, the proportion of ZEVs sold as part of Ford’s total sales remained less than 3%.
  • Suzuki received the lowest score of all automakers. The company did not have a ZEV development and sales plan until its “Growth Strategy for FY2030” was announced in January 2023. This strategy specified the timeline of EV introduction into the European, Japanese, and Chinese markets. Suzuki’s supply chain and materials decarbonisation commitments lack ambition and quantifiable targets.

Challenges faced by top carmakers in shifting to EVs

The above findings clearly point out that the automakers’ existing decarbonisation targets are insufficient to limit the global average temperature increase to 1.5 degrees Celsius, which, according to the International Energy Agency (IEA), requires a full phase-out of ICE vehicles by 2035. Thus, a more determined effort is needed.

Necessary measures include targeted and ambitious ICE phase-out regulations and legislation, and boosting investment in EV-compatible infrastructure like charging stations and creating a circular economy for battery systems and storage. Until that is done, ICE vehicles will dominate the global automotive market.

The top car manufacturers should take robust action to end the sale of ICE vehicles in their main markets – US, China, South Korea, and Japan – before 2030. In Europe, they should end the sale of ICE vehicles before that, it said. India, a part of the Global South, though, has been remarkably successful with EV adoption, especially in the 2-wheeler segment. Encouraged by its efforts, it has set high ambitions for EV transition by 2030.

Electric 2-wheelers are one of the most sought-after vehicles in India as their running costs are 20% lower than their ICE counterparts. The country sold 6,31,090 electric 2 wheelers in the calendar year 2022 and 6,90,099 in CY 2023. Here too, Ola Electric dominated the sales figures in FY 2022-23, ahead of traditional automobile players like Hero Electric and TVs Motors. India’s 4-wheeler EV market is in its infancy.

The top car manufacturers should promote renewable energy charging and increase renewable energy generation. ZEVs are only truly zero-carbon if the electricity that powers them is produced by renewable sources. These automobile giants should also build the capacity required to reuse and recycle batteries as well as improving the efficiency of repurposing and recycling.

Besides, policymakers must leverage all the tools at their disposal to manage the phase-out of ICE vehicles. They should, in collaboration with automakers, maximise a just transition to protect the economic, social, and physical health and well-being of workers and surrounding communities.

While transitioning to a clean mobility system, stakeholders must be cautious to not grow the car market in the name of phasing out ICE vehicles. The phaseout of ICE vehicles must be accompanied by a reduction in the overall number of vehicles across the globe. Ultimately, a zero-carbon mobility future must involve far fewer private cars and more efficient public transport systems.