BMW committed to bold climate action

By We Mean Business coalition | August 24, 2020

The number of leading automotive companies committed to cutting emissions in line with the goals of the Paris Agreement continued to rise this month, helping to accelerate the transition to a zero-carbon transport future.

Germany’s BMW Group is the latest global car maker to commit to setting a science-based target, through the Science Based Target initiative. Science-based targets allow companies such as BMW to set a clearly defined pathway to future-proof growth by specifying how much and how quickly they need to reduce their greenhouse gas emissions.

In addition to committing to science-based targets, BMW is also committed to procuring 100% of its electricity from renewable sources for its operations by 2050, as part of RE100 led by the Climate Group. For the year 2018, BMW achieved 75% renewable share, up from 62% in the previous year.

BMW plans to offer electrified versions of all its models and expects electrified vehicles to account for between 15-25% of sales by 2025. In 2019, the BMW Group saw its car sales rise to a record of 2.5 million worldwide, across its BMW, Mini and Rolls-Royce brands.

BMW joins other leading automakers including PSA Group, Groupe Renault and Mercedes-Benz AG, which all have approved science-based targets, while Toyota Motor Corporation and Nissan Motor have committed to set targets.

These commitments to accelerating the transition to the zero-carbon transport future come as many of the world’s largest automakers race to electrify their fleets and cut emissions. Together these moves send a powerful signal that the transport sector is reengineering to meet demand growth for electric vehicles (EVs), while addressing the urgent need to act on air pollution and climate change.

Auto manufacturers have announced over $150 billion in investments to achieve collective production targets of more than 13 million EVs annually around 2025, according to the ICCT, though much more could be in the pipeline.

Last year, Mercedes-Benz owner Daimler committed to make its entire passenger car fleet carbon neutral by the close of 2039. The goal will see the company transform its entire operations – from the 2.4 million cars it produces annually (2018), to its production plants around the world and its supply chain – over the next two decades.

Also last year, German automaker Volkswagen accelerated plans to electrify its fleet, committing to launch 70 fully electric models by 2028, up from an earlier pledge to sell 50 by 2025. VW also set long-term ambitions to make the entire company CO2-neutral by 2050, including its factories, offices and cars. Meanwhile Volvo is making progress on its commitment to phase out purely petrol and diesel power cars and EV-pioneer Tesla has now become the most valuable automaker by market cap.

Demand signals

Automakers such as BMW are reacting to the growing demand signals coming from both general consumers and the corporate car buying market. Despite a global slowdown in all car sales during the first quarter of 2020, caused by the economic impact of the COVID-19 pandemic, European EV sales rose – pushing the region’s overall EV penetration rate up to 7.5%.

Meanwhile, corporate buyers of cars continue to signal their growing demand for EVs through the Climate Group’s EV100. To date over 80 companies have joined EV100 with a commitment to accelerate the transition to EVs and make electric transport the new normal by 2030.

This includes Netherlands-based LeasePlan, which has committed to transition its entire customer fleet of 1.8 million vehicles to zero-emissions by 2030. It also includes mobility solutions groups, such as India’s Shuttl and Lyft in the US.

Despite efficiency improvements and electrification, transportation is still responsible for 24% of direct CO2 emissions from fuel combustion and road vehicles account for nearly three-quarters of all transport CO2 emissions, according to the IEA. Meanwhile, the health impacts of ICE vehicles are widespread. Nine out of 10 people breathe air containing high levels of pollutants, including that from transport, data from the World Health Organization (WHO) shows.

Companies are urged to help accelerate the transition to a zero-carbon transport future. For companies involved in the production of vehicles and related supply chain products, this means setting a bold science-based target aligned with limiting global warming to a maximum of 1.5ºC and reaching net-zero emissions by 2050 at the latest. For companies operating fleets of corporate vehicles, this means committing to transition that fleet to EVs and support charging infrastructure with EV100.

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