The paradox of electric cars and how France is taking a lead

Recently, however, France has modified the ecological bonus, its scheme incentivizing the take-up of electric vehicles (EVs), to reflect a broader view of sustainability.

In my previous blog article, I outlined the considerable progress that has already been made in reducing carbon emissions from cars on the road. I pointed out, however, that these emissions are only part of the automotive sustainability picture. Now, I’ll elaborate on that challenge, and describe a groundbreaking response to it recently implemented by the French government.

Confronting the paradox of electric cars

When we consider the car’s lifecycle, from design through to delivery, the switch to electric power reduces carbon emissions by an average of 70%. However, the remaining 30% comes mainly from scope 3 – that is, from activities in the value chain that are not directly controlled by the OEM.

Here, the battery currently has an unfavourable impact, accounting for around 30% of the carbon footprint of an EV. Extraction and manufacturing of the materials that make up the battery (lithium, manganese, cobalt, and nickel) are key contributors to emissions, and these materials are rarely recycled.

The paradoxical effect of considering only the emissions of cars on the road becomes obvious when you consider that some batteries are manufactured in countries with coal-fired power stations (60% in China) and transported thousands of kilometres by boat or trucks, which are key carbon contributors.

Broadening the automotive sustainability concept

On 10 October 2023, France took the lead in this field. The French Environment and Energy Management Agency (ADEME) revised the terms of the ecological bonus, a financial incentive scheme to encourage consumers to choose electric cars. For the consumer to receive the bonus, it’s now necessary for the car to achieve a minimum environmental score.

This score depends on the carbon footprint calculated by adding together the quantities of CO2 emitted during the various stages in a vehicle’s lifecycle prior to its use on the road.

Production of the steel, aluminium, and other materials used in the vehicle’s construction; intermediate processing and assembly of the vehicle; the carbon footprint of the battery (treated as such); production of the battery; and transport of the vehicle from the assembly line to its place of distribution in France.

In order to calculate the environmental score, the scheme defines reference values for emissions factors depending on where the vehicle or battery is assembled. If a manufacturer fails to achieve the minimum score, it can submit an additional application to deviate from some of these reference values, by demonstrating that the actual values are better than the reference values.

This looks like an effective approach that incentivizes real automotive industry sustainability. It should encourage manufacturers to prioritize sustainable development initiatives such as recycling aluminium, steel, and plastic in particular, using green steel and green aluminium, battery efficiency, battery technology and chemistry, and developing a circular ecosystem for batteries.

Conclusion

Of course, there are still outstanding questions.

1. Will schemes like this be enough to help governments and companies achieve automotive sustainability goals?
2. How will manufacturers wishing to set up in France adapt?
3. More specifically, what about batteries from Asia for vehicles produced in France?
4. This last question may partly be answered by the European Commission’s introduction of digital passports for batteries, which will be mandatory by 2026 and will improve traceability.

Initiatives like France’s revised ecological bonus scheme are valuable because they seek to build a picture of the environmental footprint throughout the lifecycle of the car, “from cradle to cradle,” and to set the rules of the game for all car manufacturers: rules that are fair and unequivocal.

But to make these measures work, manufacturers must dramatically increase their visibility of the end-to-end value chain, and of their own businesses. These are issues that I hope to return to in future articles.

Contact me to discuss the future of automotive sustainability and how data-driven tools can contribute to industry goals.