An international comparison reveals that EV brands from the U.S. are catching up with their European counterparts in considering the environmental impacts and human rights in their supply chains. Behind the comparison is The Sunrise Project, funded by the TAH Foundation.
The race among electric car manufacturers towards cleaner and more responsible supply chains is accelerating.
Over the past year, Ford and Tesla have risen alongside and beyond European brands, as revealed in today’s published Leaderboard report by the Lead the Charge coalition. Ford, the winner of the comparison, surpassed last year’s leader, Mercedes. Tesla, on the other hand, improved the most and rose from ninth place to third, surpassing Volvo and Volkswagen.
“It’s clear from this year’s findings that leading global automakers are gearing up in the race to cleaner automotive supply chains,” commented Chris Alford, Senior Strategist of The Sunrise Project, behind the comparison.
If car brands intend to meet climate goals, they must rapidly reduce the environmental impacts of their supply chains, particularly in steel, aluminum, and battery minerals, and ensure responsible supply chains.
Ford’s ranking is mostly explained by its progress in steel, aluminum, and battery minerals. Tesla’s rise is particularly justified by being the first electric car manufacturer to disclose disaggregated scope 3 emissions from its supply chains. The company also achieved the highest score in Indigenous rights, although there is still much room for improvement for all car manufacturers in this regard.
“Progress overall is lackluster compared to the scale of the challenge ahead and the industry as a whole needs to pick up the pace if they want to meet the expectations of regulators, investors and consumers for cleaner cars” summarized Alford.
Automotive industry can accelerate the development of the steel industry
Individual companies’ progress demonstrates that rapid improvements in supply chain responsibility are possible.
Furthermore, the demands of the automotive industry extend to suppliers such as steel manufacturers, whose production methods have a significant climate impact. For example, global steel production accounts for about 7–9% of the world’s carbon emissions, and in the steel sector alone, over two-thirds of EV manufacturers have now improved compared to last year, with Volvo maintaining its top position. Only a year ago, over half of car manufacturers received zero points for their steel actions.
Progress can also be observed on the Asian continent among Chinese car manufacturers, aiming to expand their market share in Europe. The new EU Battery Regulation and the Carbon Border Adjustment Mechanism (CBAM) lifting the price of carbon-intensive imported steel are signals of tightened EU regulations, to which companies like Geely and BYD have responded with more responsible procurement commitments. In contrast, Japanese companies Honda and the world’s largest car manufacturer Toyota still rank at the bottom of the comparison on all measures.
The TAH Foundation funds the work behind the Leaderboard
The Leaderboard is annually published by the coalition Lead the Charge, coordinated by The Sunrise Project, which ranks the world’s 18 leading electric car manufacturers. One of the funders of the work is the TAH Foundation, which currently focuses on reducing global emissions from steel production.
The campaign comparing electric car manufacturers’ supply chains is unique even on an international scale and effectively highlights the automotive industry’s leverage on steel manufacturers.
“European car manufacturers were the first to enable progress towards green steel production with their procurement agreements, but now manufacturers from other continents are catching up. The EU’s Carbon Border Adjustment Mechanism (CBAM) has a significant impact. This year, procurement agreements should further accelerate steel companies’ additional investments in low-emission production and, at the same time, drive ambitious emission targets for steel production,” says Harri Lammi, Head of Environmental Projects at the TAH Foundation.
For more information:
Harri Lammi, Head of Environmental Projects, TAH Foundation
+358 50 383 1822