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Business News/ Opinion / Columns/  The dirty secret of EV supply chains that can’t be overlooked

The dirty secret of EV supply chains that can’t be overlooked

Exhaust-free electric vehicles are quite ecologically costly to make

The auto industry must come clean on its cradle-to-gate carbon footprint (Photo: Bloomberg)Premium
The auto industry must come clean on its cradle-to-gate carbon footprint (Photo: Bloomberg)

As the world focuses on the CoP-26 global climate summit in Glasgow, the dawn of the electric vehicle era is sure to be touted as a major solution to a severe emissions problem. What few policy makers and business leaders seem to acknowledge, though, is just how dirty a process making these cars has become. The transport sector is responsible for almost a quarter of direct carbon-dioxide emissions from burning fuel. Of that, passenger cars account for 45%. It goes beyond tailpipe exhaust: Every step of making a vehicle’s 20,000-30,000 parts, which involves a few thousand tonnes of aluminium, steel and other materials, produces emissions.

EVs were supposed to be the answer to this. But while cleaner cars may eventually solve the tailpipe-emission problem, they don’t address all the damage done to the environment while making them. Compared with traditional internal combustion engine (ICE) vehicles, greenhouse gases released while making battery-electric cars account for a higher portion of life-cycle emissions. As the EV hype gains momentum, battery production and research is powering ahead and sales are growing. That means material emissions will rise to over 60% by 2040 from 18% today, according to McKinsey & Co (

“The importance of supply chain decarbonization cannot be ignored," Greenpeace noted in a report published this week, which examines car companies’ commitments and actions. “Accounting for about 20% of the life cycle of [greenhouse gas] emissions, decarbonizing the production phase of a car is harder than the use phase."

Consider this: As technologists work to make better EV batteries, one issue is getting more energy into a smaller, lighter powerpack. In their current form, these units end up becoming heavy, increasing the total weight of the car, which in turn requires more energy to drive. To deal with this, carmakers are turning to aluminium for light-weight body designs, with EVs using 45% more of the metal than traditional vehicles. Emissions from aluminium have started rising, too, because it’s energy-intensive to mine and produce.

Then, there’s making the powerpack. Materials used for essential parts of the battery are even more carbon intensive. Manufacturing requires “more energy and produces more emissions than" a conventional one “because of the electric vehicles’ batteries," according to a 2018 International Council on Clean Transportation report.

Manufacturing of the body and chassis account for around half the emissions produced from cradle-to-gate—that is, the carbon impact from raw material extraction to a completed vehicle. The metals used both for ICE vehicles and battery-electric ones make up 53% and 47% of the manufacturing carbon footprint, according to the Greenpeace report. And as companies try to make batteries that can take cars further, they are using nickel, cobalt and manganese, which generate still more greenhouse gases.

Despite this, we don’t frequently hear about the scale of supply-chain emissions. If policy and car makers don’t start focusing on this soon, they risk losing the battle with emissions targets altogether. It’s not like we haven’t known about the risks, it’s that important players effectively have chosen to ignore them and stick to simpler rhetoric.

The best path forward starts with better disclosure. If we don’t know how big the problem is, we don’t have to acknowledge it. In theory, Scope 3 disclosures, which Greenpeace defines as “indirect emissions that are a result of an organization’s operations, but are not owned or controlled by the company," should help do that. The organization notes that the high greenhouse gas emissions in the car manufacturing supply chain are “not even properly quantified by carmakers, because of poor disclosure of their suppliers’ [greenhouse gas] emissions data (Scope 3)," adding that half of the companies do not disclose this data, or only do so partially.

Big auto companies and EV upstarts aren’t under any pressure to divulge this information. Investors aren’t asking, so manufacturers aren’t telling, or may not even know. To gauge how much progress is being made (or not), these numbers should be made part of the mandatory disclosure.

None of this is to say we are doomed. There will always be emissions. But we need to go beyond the big, lofty goals and get into the weeds of realistic solutions. These should also include battery recycling, prioritizing types that use less carbon-intensive materials, or emission caps on the battery and electric vehicle manufacturing process. Small companies like Nano One Materials Corp and Euro Manganese Inc are thinking about how to decarbonize supply chains for battery parts. Other, bigger players need to catch on, too. Without a sharper focus, we will just be chasing grand ambitions in a much hotter world. 

Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia.

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Published: 07 Nov 2021, 10:56 PM IST
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