Emissions from manufacturing in the autos sector: discussion paper

Nikolaus Hastreiter, Alfie Begley and Simon Dietz

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This discussion paper examines the role of production emissions – specifically those arising from materials and manufacturing – in car manufacturers’ carbon footprints and emissions reduction targets. The current Transition Pathway Initiative (TPI) Carbon Performance (CP) methodology for the automotive sector focuses on tailpipe (Scope 3 Category 11) emissions, which remain the largest contributor to lifecycle emissions for internal combustion engine vehicles (ICEs). However, as the industry shifts toward electric vehicles (EVs), a growing share of emissions is associated with upstream activities, including vehicle and battery production. The paper identifies substantial gaps and inconsistencies in how car manufacturers disclose manufacturing-related emissions. While most companies report Scope 1 and 2 emissions – covering direct and energy-related emissions from their own operations – at a group level, data on Scope 3 Category 1 emissions, which cover upstream supply chain activities, is sparse and inconsistent. Disclosure specific to passenger cars is even rarer. This limited data availability poses challenges for external stakeholders seeking to assess companies’ full emissions profiles and decarbonisation strategies. To address this, the paper proposes a preliminary approach to incorporate production emissions into TPI’s current CP methodology. Using IEA global average emissions factors and sales data for four major manufacturers – BMW, General Motors (GM), BYD, and Tesla – the analysis shows that including production emissions in companies’ historical carbon footprints and decarbonisation targets leads to a deterioration in alignment with low-carbon scenarios, particularly over the long term. These findings underscore the materiality of production emissions to car manufacturers’ decarbonisation strategies. They also highlight the narrowing gap between mixed ICE/EV producers and pure EV companies when upstream emissions are considered. A narrow focus on tailpipe emissions therefore may not comprehensively capture companies’ climate actions. The paper concludes with recommendations for investors to engage with companies to improve disclosure, support standardised reporting, and encourage comprehensive target-setting that includes production emissions.

JEL-codes: J01 R14 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2025-12
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