In 2022, the automotive industry has shifted to a higher gear to speed up the transition toward a more sustainable future. In 2022, Tesla alone sold more than one million electric cars. Ford, to catch up, will be investing $50 billion until 2026 in electric vehicles and battery production.
Is the automotive sector going to be an electric vehicle industry? What steps are brands taking to improve their sustainability, reduce their impact, and become — at least — carbon neutral?
Which automakers are ahead in the electric vehicles race? Which automotive brands need to improve?
Find out in our EV industry overview below.
Who dominates the electric vehicle market?
According to a Vantage Market Research report on the global electric vehicle market, there was a 100% increase in EV sales between 2020 and 2021, reaching a total of over 6.9 million EVs and a market size of over $165.1 billion.
India is currently the fastest-growing electric vehicle market (though Europe is not far behind) while Tesla is the largest brand with over one million EVs sold in 2022 — the issue with the autopilot does not seem to have affected the American automaker at all.
Volkswagen and General Motors (GM) are also expected to be among the leaders in 2025, as the market for electric vehicles is expected to surge ahead by a whopping 17.5% a year between 2022 and 2028.
However, the race toward the highest share of the electric vehicles market is not the only goal. To achieve a larger number of EV sales, companies are now also considering other things they did not take into account before and that could, directly and indirectly, affect their production and sales.
Companies’ stances on battery recycling, sustainability, SDGs, their progress, and their reports are just some of those.
Top car makers EV Portfolio: what electric vehicles are available now? What’s the size of the electric vehicle industry?
Ford. Ford currently has three fully electric models on the market: the pickup truck F-150 Lightning, the Mustang Mach-E, and E-Transit Model. The automaker is however selling most of its models in a plug-in hybrid (PHEV) version too. It is also planning on launching seven new electric models in Europe by 2024. By 2030, Ford is forecasting that fully electric vehicles will account for 50% of global sales as the global capacity to produce will reach 600,000 EVs annually by the end of 2023.
Audi. Audi’s electric cars are called e-tron. By 2026 the company is planning to have twenty fully electric models. Furthermore, by 2033 the german brand will stop producing vehicles with internal combustion engines everywhere, except in China where Audi is still investigating the local demand for EVs. Audi EVs deliveries increased by over 44% in 2022 compared to 2021, despite a shortage of semiconductors that had a major impact on the entire automotive industry.
Tesla. Tesla aims to reach the 20 million mark for electric car sales per year by 2030.
Mercedes-Benz. Mercedes Benz will only sell fully electric vehicles by 2030, wherever market conditions allow. The new electric models, EQA, EQB, EQE, and EQS helped Mercedes-Benz EVs sales grow by 124% in 2022 reaching a record number of 117,800 cars. (for a complete breakdown of the EV market in Germany, check our 2023 outlook).
General Motors. By 2025, GM intends to sell a million EVs per year in North America. Thanks to a joint venture with partners in China it plans to increase sales of electric vehicles, but also to diversify its portfolio of electric vehicles.
How are the top carmakers promoting sustainability in manufacturing electric vehicle batteries?
Circular economy in the electric vehicle battery industry
Let’s dive into how each company from our review of the EV market applies circular economy principles:
Ford appears to have a strong approach to the circular economy. Firstly, the partnership with Redwood Materials, an American-based company with a recycling technology that can recover, on average, more than 95% of strategic materials such as nickel, cobalt, lithium, and copper.
The partnership is intended to help with identifying the supply chain network, creating recycling options for scrap and end-of-life batteries, as well as with ramping up lithium-ion recycling.
Secondly, in their sustainability report, Ford claims to be the largest automotive closed-loop aluminum recycler in the world, as they can recover aluminum scrap during parts stamping and recycled it back into fresh alloy for new vehicles, saving 95% of the energy that would be required to create new aluminum from raw ore.
Third, Ford has focused on increasing the sustainability of plastics in vehicles design by using 20% recycled and renewable plastics in new vehicle designs for North America and Europe by 2025 and 10% for China and Turkey. Standards such as ISO 14021 have been established to monitor the recycled and renewable content that comes from waste products, generated by other industries.
Finally, a partnership signed with Everledger at the end of last year will allow the carmaker to track every battery and its component from the very beginning to the very end of its lifecycle.
Audi and Volkswagen
The two German companies have jointly developed together a software, the BattMAN (Mattery Monitoring Analysis Necessity) ReLife Analysis, to examine the conditions of high-voltage batteries, and based on the conditions identified, several actions will be taken with the battery:
(1) remanufacturing, when the battery is still in good to very good condition, it will be used as a replacement part in an electric vehicle;
(2) second life, meaning the battery can be used as stationary storage in one of the fast-charging stations;
(3) efficient recycling, the battery reached the end of its useful life, and it will be broken down into individual fractions such as aluminum, copper, plastics, and ‘black powder for recycling.
Audi has been optimizing recycling through the Aluminum Closed Loop, by turning aluminum waste from production into new aluminum.
Audi claims it takes into consideration concepts such as reuse and recyclability as early as the development stage of a vehicle for each part to be considered when it reaches its end of life in terms of deciding what further action to take (to learn more take a look at our Audi report).
For example, in the Audi Q4 e-tron electric SUV, more than two dozen parts contain a portion of recycled material. Furthermore, a significant part of the headlight mounts, wheel well liners, fender covers, floor covering, and wheel spoilers are made from secondary materials.
Genar Motors uses state-of-the-art Nickel Cobalt Manganese Aluminum (NCMA) chemistry, designed to reduce the cobalt content in batteries by more than 70 percent. Additionally, General Motors has enabled the reuse or recycling of 100 percent of returned batteries.
GM is also planning on building four battery cell manufacturing facilities through Ultium Cells LLC (an equally owned joint venture with LG Energy Solution) by 2025, the latter is also collaborating with Li-Cycle to aim to recycle up to 100 percent of the material scrap from Ultium battery cell manufacturing. To check the – GM full report
Mercedes Benz noticed that reprocessing a used battery wastes less energy and raw materials than producing a new one, the company is reprocessing or reusing 70% of its batteries.
Additionally, all Mercedes-Benz car models are 85% recyclable per ISO 22628 and also comply with the European End-of-Life Vehicles Directive 2000/53/EC, in which 95% of the materials in cars and vans with a gross vehicle weight of up to 3.5 tons have to be capable of being reused or recovered.
By 2030, Mercedes-Benz is planning to achieve an average of 40% of secondary materials, in its car fleet, and through environmental certificates (360°Environmental Check) to show which components are partly made of resource-conserving materials.
For years, Tesla has been working with third-party battery recyclers, but in 2020 it opened the first phase of its cell-recycling facility for the processing of both battery manufacturing scrap and end-of-life batteries, allowing to close the loop on materials generation, allowing for raw material transfer straight to our nickel and cobalt suppliers.
Tesla is claiming they are best positioned to recycle efficiently and maximize key battery material recovery as they manufacture its in-house cell program.
What’s the state of electric car supply chain management? How does electric car production affect the environment?
The production of an all-electric vehicle generates about twice as much CO2 as that of a conventional internal combustion-engine vehicle, primarily due to lithium-ion batteries.
In an article published in MIT’s Climate Portal, Yang Shao-Horn, JR East Professor of Engineering in the MIT Departments of Mechanical Engineering and Materials Science and Engineering explains that fifteen tonnes of CO2 are emitted in the air for every tonne of mined lithium, along with the use of chemicals that can leave contaminants and toxic waste behind, and big quantities of water, in areas where water supply is scarce.
Considering this context, top automotive brands have tried in their way to address these challenges.
In 2021, Ford initiated a battery supply chain mapping with RCS Global Group to gain a better understanding of the sources of the cobalt, nickel, and lithium used in their Ev’s battery production. Furthermore, the car company has introduced 2021 a 100% response rate requirement from all in-scope suppliers for the cobalt due diligence program.
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Audi is using Artificial Intelligence in a global pilot project to analyze the extent to which suppliers are meeting the sustainability criteria, with a focus on pollution, human rights violations, and corruption. Algorithms evaluate data from digital networks and social media for about 4,000 suppliers out of the 14,000 direct suppliers, and it is designed to monitor constant changes in the supply chain.
Mercedes Benz is aligning its suppliers with the carbon neutrality goal by 2039 where almost 90% of the group’s suppliers have signed the ambition letter and committed to supplying only CO2-neutral products by 2039.
Electric vehicles suppliers’ sustainability standards
Suppliers of production materials are required to operate with an environmental management system, certified according to ISO 14001 or EMAS, and to adhere to the Supplier Sustainability Standards. For those suppliers of battery cells containing cobalt and lithium, they are required to exclusively work with mines that have been audited per the Standard for Responsible Mining of the Initiative for Responsible Mining Assurance (IRMA).
Making electric vehicles manufacturing evergreen
For the future, Ford is investing $50 billion until 2026, in electric vehicles and battery production. Specifically, Ford is investing in two campuses in Tennessee and Kentucky that will produce the next generation of electric F-Series trucks and the batteries to power future electric Ford and Lincoln vehicles.
Ford’s new Tennessee assembly plant is designed to be carbon neutral with zero waste to landfill once fully operational.
Twin battery plants will be located in the BlueOval SK Battery Park, in central Kentucky and are intended to supply Ford’s North American assembly plants with locally assembled batteries for powering next-generation electric Ford and Lincoln vehicles.
Mercedes Benz Cars and Vans are planning to electrify the vehicle portfolio by 2030 and will be expanding the battery production network to include factories on three continents. Additionally, battery factories in Esslingen- Brühl near Stuttgart and Tuscaloosa, Alabama (United States) were preparing for production launch in 2022.
The factory in Zwickau, Germany where the new Audi Q4-Tron models are produced is using carbon-neutral processes, including energy purchased only from renewable sources and a highly efficient combined-heat-and-power plant.
General Motors has invested in two manufacturing plants for Ultium battery cells, and in expanding a battery testing lab, the largest, most advanced battery test lab in America for over a decade, through the formation of Ultium Cells LLC, a joint venture with LG Energy Solution.
Charging Station Infrastructure: which country is winning the charging stations race?
China appears to be the region with the most charging stations, with 1.15 million publicly available EV charging stations, followed by Europe with over 376,000 as of September 2022, followed by the US with 96,000, and India with 1,700.
As battery technology improves, charging times are gradually shortened, still, it has been estimated that 12.5 million chargers will be needed by 2030, the equivalent of 1 charger for 10-15 cars.
Currently, Ford has over 20,500 charging stations through the BlueOval Charge Network in North America. In Europe, 200,000+ charging stations are available on the FordPass Charging Network in partnership with NewMotion.
Audi has introduced the concept of premium experience when it comes to charging infrastructure, at a pilot location, Audi Charging Hub in Nuremberg, designed for high-power charging, for replacing home charging terminals in urban areas, and, optionally, for offering customers a connected lounge area.
Additionally, along with Volkswagen, Audi is a member and a joint venture partner with IONITY, Europe’s largest public high-power charging network, planning to expand with an additional 5,000 fast-charging points by 2025 at over 1000 locations in Europe.
In 2022 alone, Tesla opened over 1,200 new Supercharger locations around the world for a total of nearly 4,000 supercharging locations with over 40,000 plugs.
Mercedes me Charge provides access to over 685,000 alternating and direct current charging points worldwide. In 2021, Mercedes-Benz launched Green Charging in Europe, the United States, and Canada, to offset the energy used during charging by feeding energy from renewable sources into the grid.
Green Charging is an integral part of Mercedes me Charge to provide transparency over the energy sources for the charging stations and to promote the use of electricity from renewable sources.
Through the joint venture with IONITY, Mercedes-Benz AG has access to a high-performance fast-charging network that is operated with 100% green electricity. Additionally, Mercedes-Benz is cooperating with Shell to provide users of its electric vehicles with access to over 30,000 charging points (by 2025) within Shell’s Recharge Network.
The need for a new sustainability rating
In the wake of the current multiple greenwashing scandals – that affected the automotive sector too – and the loss of confidence in the ESG system, Impakter Index is designed to be a reliable and accessible go-to source of independent information.
The first sector to be released within Impakter Index includes the most valuable car brands and All of the brands included in our electric vehicle industry sustainability evaluation have already released several fully-electric vehicles.
Who will be winning the EV race?
It is hard to determine at this point, since there are different aspects to take into consideration, besides market share.
As noted above, getting an edge in the electric vehicle industry is not only about the EV portfolio and market share, but also about the technologies used to make the product affordable and accessible, circularity, and supplier management.
The good news is that, according to Vantage Market research, the electric vehicle growth is driven by several factors that concern all of us, a growing desire to reduce carbon emissions and the increasing cost of traditional gasoline-powered vehicles.
And if car companies are competing to win this race, there is hope to see the automotive sector fighting to reduce GHG emissions.
While this article focused mainly on EVs, the next piece will contain a summary of the sustainability initiatives of the top 10 most valuable car brands, not only to create awareness but also to provide some guidance to both investors and consumers alike.
Editor’s Note: The opinions expressed here by the authors are their own. Not those of Impakter.com — In the Featured Photo: An electric vehicle charging. Featured Photo Credit: Markus Spiske.