Despite the potential softening of U.S. environmental regulations by the Trump administration, automakers will continue to push forward on innovations that make automobiles, and in fact, the transportation industry overall, more environmentally-friendly.
The continued focus is not just because more and more middle class consumers are demanding cleaner cars and safer transportation – it’s because automakers are already at the center of a sustainability revolution that is well underway.
New car models, new business models
Automobile manufacturers’ biggest impact on climate change is through the cars they sell, as 79% of manufacturers’ emissions come from fleet emissions. Renault, Nissan, BMW, Toyota and specialists like Tesla are leading the way in decarbonising their fleet emissions by increasingly selling cars that are battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs) and fuel cell vehicles (FCVs) rather than Internal Combustion Engines (ICE). From a resource use perspective, ICE cars are highly inefficient with only 14% of energy reaching the wheels.
Beyond repowering, the industry is ripe for business model innovation, as ride sharing businesses have demonstrated. Cars are not used most of the time (a car is parked 96% of its lifetime). New car-sharing business models mean that 4 to 10 and even up to 15 cars could be replaced by 1 shared car. Other usage patterns can also have huge impacts with a factor 9.3 reduction in energy consumed by commuting 1 time per week versus the typical 5 times a week. Similarly, switching from cars to rapid transit buses can reduce emissions by a factor of five.
Pricing parking according to market forces and maximum limits (The Shard in London has 48 parking places for its 96 storeys) instead of being free or subsidised can bring significant economic benefits (€190 million for Amsterdam in revenues alone), encourage car sharing and public transport use, and stop subsidising those that drive to work alone (76% of Americans in 2014). Even Apple’s new 318,000 square meter HQ, planned to be one of the most resource efficient buildings in the world, still must allocate 325,000 square meters for parking due in large part to limited mass transit options.
Driving forward with better, safer and cleaner cars
As more and more demand comes from the developing world’s booming middle class, cars will need to be much cleaner, shared, and ultimately smart and driverless, which means safer and healthier for all, with less congestion and air pollution.
There is great potential on the automobile highway if the world’s car makers continue developing low impact products and strategies regardless of temporary opportunities from state regulators to turn the clock back.
The world is driving ahead with better, safer, and cleaner car-based transportation. Those firms which do not innovate on the global curve risk being left far behind.