Car industry divided on road to zero emissions after climate deal snubbed
Volkswagen chief executive Herbert Diess could not have been clearer.
“Climate change will be the greatest challenge for humanity in the coming decades,” he declared at the Munich motor show in September, as charts of rising emissions flashed on a vast screen behind him.
Yet, as global car leaders gathered on stage in Glasgow at the COP26 summit to pledge to end the sale of polluting cars anywhere in the world by 2040, VW was absent.
It was not alone. Toyota, Stellantis and Hyundai were among the leading manufacturers to shun the Glasgow deal, which commits carmakers to sell only zero emission new vehicles by 2035 in the biggest markets and 2040 in others.
In the end only six — Ford, General Motors, Daimler, BYD, Volvo Cars and Jaguar Land Rover — signed, a far cry from the hoped-for parade of car giants.
“What a failure . . . what an embarrassment. I almost have no words for it,” said Thomas Ingenlath, boss of Polestar, the electric brand owned by Volvo, referring to the groups that refused to sign.
The split between signatories and non-signatories highlights the tensions within the industry. Some car executives think clear targets are vital to help transform the sector, and worry the groups refusing to sign have been shown up as greenwashing hypocrites.
Volvo Car boss Hakan Samuelsson, the only chief executive from a leading carmaker on stage at the pledge’s unveiling, backs clear, formal targets, saying they are needed to halt the development of combustion engines.
“It doesn’t matter if it’s 2032 or 2035 or whenever, no one wants to work on a product that has an end date,” he told the Financial Times.
Climate action groups were withering in their condemnation of the non-signatories, too.
Helen Clarkson from the Climate Group, a non-profit organisation, said the industry holdouts were “on the wrong side of history”.
But for the holdouts, binding emissions targets outside their control leave them exposed to pledges they may not be able to deliver.
Despite some saying privately they will probably hit the COP26 targets, they warn the infrastructure, such as charging stations, must be put in place if they are to achieve the declaration’s goals.
They also stress governments and industry have already made big commitments to cutting emissions.
VW, for example, has pledged to spend €35bn in its transition to electric cars, while emissions rules in Europe and China are forcing manufacturers to switch from internal combustion engine models.
“We have the same goals, but there’s a large chunk of reputation behind [signing] it,” said Ralf Pfitzner, head of sustainability at VW.
He said that “rebuilding trust” after the 2015 diesel scandal, where VW was found to have deceived consumers and regulators about pollution levels, meant the company felt it could not commit to the goals.
“If today we cannot credibly sign something, then let’s not do it. But at the end of the day we are executing, we are bringing out EVs to the streets.”
Groups with British investments, including Toyota, Nissan, Stellantis, BMW and Honda, could not be brought to the table despite intense pressure from UK officials.
Even a suggestion by UK officials that delegates from non-signees would be barred from the “blue zone” — the security-screened area of COP26 that played host to world leaders and journalists — failed to win them round.
Late concessions, such as offering opt-outs for some markets or a deal to make 90 per cent of cars emissions-free, did nothing to help, according to two people who witnessed the negotiations.
Yet big carmakers were not the only notable absentees from the COP26 declaration.
China, the world’s largest car market, the US, the second biggest, and Germany refused to sign the commitment to eliminating new car emissions by 2040.
However, several large cities and regions across the world backed the deal with climate scientists and carmakers pointing to their key role in making the switch to electric.
In the US, California, New York and Washington as well as Dallas, Charleston, Atlanta and Seattle signed the agreement.
Johan Rockstrom, director of the Potsdam Institute for Climate Impact Research, said: “Countries that have a really strong state [or regional] level of governance will play a really important role in pushing towards social tipping points.”
Daimler boss Ola Kallenius, a signatory who attended the summit, added that commitments by governments and cities to the green transition are key, expressing confidence carmakers would deliver in terms of product development.
“The product [manufacturing electric cars] is the thing I am least worried about,” he told the Financial Times.
Yet even among the backers of the deal, there is agreement that much more has to be done by governments to ease the switch to electric with charging stations and the necessary infrastructure to support a zero emissions industry.
Ford’s sustainability boss Cynthia Williams, asked on stage at the Glasgow gathering what was needed, replied: “Infrastructure, infrastructure, infrastructure.”