AUTOMOTIVE 

Impact

The newly formed Automotive research team focused on the transition to EVs, OEM (automaker) alignment to the Paris Agreement, and inevitable destruction of demand for oil. Automotive Company Profiles, published in December 2022, provide an overall assessment of 20 vehicle manufacturers (mostly CA100+ companies), comprising approximately 85% global passenger vehicle production. The analysis in these profiles captures the alignment of these companies to Paris Agreement goals, in addition to the stage of development of their electrification strategy.

 

The profiles track company short to long-term Net Zero targets, how successfully these companies are implementing strategies to achieve these targets, and the transparency in financial disclosures and decarbonising of capital expenditure. Furthermore, they consider executive remuneration and how incentivised senior company leaders are to meeting emissions targets.

 

To complement these analyses, Carbon Tracker published an overarching narrative report Slipped Gear, detailing key themes from these profiles. Our first digital event in this sector saw an engaging panel discussion, resulting in numerous follow-up stakeholder discussions. Including Inchcape, the UK’s largest automotive distribution and retail company using our research in their reporting process. As well as consultations with asset managers and UK Department for Business, Energy & Industrial Strategy.

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Looking Ahead to 2023

Building on the Automotive Company Profiles, we are exploring a project on the automotive loan Asset Backed Security (ABS) market. The project will look at the risk to investors who continue to buy bonds collateralised against ICE vehicles. By highlighting these risks, capital is reallocated and shifted away from greenhouse house gas emitting vehicles and towards zero-emission vehicles, enabling an accelerated automotive energy transition to cleaner and more efficient mobility.  Our research will also highlight the disconnect between automakers’ ICE sales plans and alignment with the Paris Agreement.