As investor priorities change, such as ESG-driven capital allocation, as consumer preferences evolve, with younger generations favouring ethical brands, and as regulations are introduced, the strategic value of sustainability will only grow, and its tangible returns will become undeniable.
Electrification is just one way in which automakers can achieve cleaner mobility; what else should the industry consider in the quest to reduce the environmental impact of mobility?
While electrification is critical, it alone cannot achieve sustainable mobility—it needs to be accompanied by intelligence, sharing, and decarbonisation.
In terms of intelligence, smart technologies reduce congestion and emissions by optimising vehicle operations. Examples include intelligent navigation using real-time traffic data to shorten routes, cutting fuel consumption by 15 to 20 percent, and driving assistance systems that enable smoother acceleration and deceleration, minimising energy waste from abrupt stops.
Sharing refers to maximising resource utilisation. Shared mobility slashes emissions and space demands; one shared vehicle replaces four to six private cars, drastically reducing greenhouse gases. In Bremen, Germany, for example, car-sharing avoids 1,600 tons of CO₂ per year; and car-sharing means less space is required for parking—indeed, according to data from Shanghai Hongqiao Transportation Hub, car-sharing can reduce required parking space by 58 percent, freeing urban land for greener uses.
The third factor, decarbonisation, addresses emissions beyond the tailpipe. That includes things like lightweight materials such as recyclable composites, which cut vehicle weight by ten to 15 percent, improving efficiency. It also includes vehicle-to-grid (V2G) technology, which stabilises energy grids and boosts renewable electricity usage; and zero-carbon factories and low-carbon manufacturing which gain momentum among policymakers and automakers. Looking ahead, energy diversity will be key. Electrification must coexist with alternative solutions like green hydrogen, which is already proving viable for long-haul heavy-duty transport.
Circular economy is becoming an accepted business practice in the automotive industry, but it’s far from maturity. How easy is it to build circularity into mass-market business models and into mainstream manufacturing processes and operations?
Building a circular economy in mass-market automotive is not just aspirational—it’s already operational. China’s battery recycling ecosystem exemplifies this progress. A systematic recycling process sees end-of-life EVs entering dismantling facilities, where batteries are extracted and sent to certified recyclers. Batteries with residual capacity are tested, sorted, and repurposed for applications like construction machinery or low-speed EVs; and non-reusable batteries are broken down into raw materials such as lithium and cobalt, through purification, then fed back into battery production.
While China’s battery recycling chain is mature, profitability models for some segments remain under exploration. Standardisation and regulations are also critical to ensure scalability and environmental integrity.
Europe’s remanufacturing ecosystem for internal combustion engine components such as transmissions and engines, offers a proven template for circular economies, combining industrial expertise with regulatory frameworks.