The report analyzes 15 of the world’s largest automakers with combined market capitalization of $846 billion. They are: Nissan, Renault, BMW, Toyota, Daimler, Honda, Ford, PSA Peugeot Citroen, Mazda, General Motors, VW, FCA, Hyundai, Tata Motors and Suzuki. These companies represent about 90 percent of the global auto market by sales volume.
It says US car giants General Motors and Ford are the most at risk — their emissions penalties could potentially equate to a combined $1.8 billion (114 percent of earnings before interest and taxes) and $1.2 billion (27 percent), respectively (see chart). “And that is before we factor in elements such as negative brand and reputational impacts,” says James Hulse, CDP’s head of investor initiatives.
Hulse told Environmental Leader that he does expect US and UK authorities to go after these car companies for emissions failings. To be clear, VW installed defeat devices in vehicles to beat emissions tests and then lied about it to authorities. These other automakers could face penalties for not complying with countries’ fleet emissions standards, not for lying to the feds.
“The VW scandal really highlighted the importance of more closely monitoring fleet emissions levels and that’s why we’re seeing tougher regulations and can expect penalties for non-compliance to be imposed,” Hulse says, adding that automakers can expect even stricter emissions rules in the future.
“In fact our research shows that global regulations need to become even tighter in order to align with science-based targets to limit global warming to a 2-degree rise,” he says.
The report says about 20 percent of the industry’s emissions come from the manufacturing stage. BMW, VW, Daimler and FCA were the only companies to receive an “A” grade from CDP on management of emissions at this stage of the process.
Four automakers have taken a lead on advanced vehicles — the report defines this to include battery electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles — which CDP says puts them at a competitive advantage, especially in light of the Paris climate deal. They are: Nissan, Renault, BMW and Toyota. And while Volkswagen receives an “E” grade — that’s the lowest — for fleet emissions following the emissions scandal, CDP gives it “A” grades in the advanced vehicles and manufacturing emissions criteria.