This surprising change can help the auto industry tackle emissions goals

SourceWorld Economic Forum
CountryMiddle east

To reach emissions goals, the automotive industry must make large-scale changes. As powertrains electrify, the largest contributor of automotive carbon emissions won’t be from the tailpipe, but from the production of materials that make up the car. New standards and approaches to collaboration and competition will transform emissions and how participants work together throughout the industry. In early December, the European Union announced it would slash at least 55 percent of carbon emissions by 2030, up from the previous target of 40 percent. Proponents of the agreement lauded the consensus, while some climate activists expressed doubt on reaching such an ambitious goal. Indeed, the targets are aggressive, and require a large-scale transformation of a number of industries—including the automotive industry. Such changes are possible with a new approach to collaboration – and competition. Transitioning away from the ‘linear economy’ means systems-wide changes, including decarbonizing production and designing products for recyclability at ‘end of life’.

For the automobile industry, it means achieving transformation at the scale of Henry Ford’s legendary assembly line, or Toyota’s famous ‘Just In Time’ production system, one that timed manufacturing to dealer orders to minimize parts inventory. A new Circular more...