Thirty-eight countries and eleven automakers signed the Declaration on Accelerating the Transition to 100% Zero Emission Cars and Vans at COP26 in Glasgow, the first global pledge to accelerate the replacement of highly-polluting internal combustion engine vehicles with electric vehicles. The main goal of this agreement is to work towards all sales of new cars and vans being zero-emission by 2040 or earlier, or by no later than 2035 in leading markets. Over 40 state and local governments throughout the world also signed the agreement, including our very own Ann Arbor, Michigan.
Of the eleven automakers that signed the pledge, only three of the top ten car manufacturers in the world, Ford Motor Company, General Motors, and Mercedes-Benz (a subsidiary of Daimler), are represented in the agreement. This leaves out the other major car manufacturers, including Volkswagen, Toyota, Honda, BMW, China’s SAIC Motor, Stellantis (formerly Fiat-Chrysler and PSA), Hyundai, and the remaining subsidiaries of Daimler. Of the thirty-eight countries that signed the agreement, nine of the top twenty-five countries by car market size are represented. They are: the United Kingdom, Turkey, Mexico, Poland, Belgium, the Netherlands, Canada, Sweden, and Austria. Many of the world’s largest auto markets, including China, Japan, the United States, Germany, South Korea and Japan, did not sign the agreement.
Although a significant amount of major car manufacturers and governments have not signed this pledge, all hope is not lost. On the contrary, this agreement is a significant step forward, as it will likely lead to an accelerated phase-out of internal combustion engines and a phase-in of electric vehicles for two reasons:
1. The commitment of the few major car manufacturers will likely push the remaining ones to accelerate a phase-in of electric vehicles.
2. The commitment of some major countries will likely push car manufacturers and other countries to accelerate a phase-in of electric vehicles.
First, it is likely that the commitment of the few major car manufacturers will add significant pressure on the remaining companies to accelerate a phase-in of electric vehicles. As more people begin to prioritize addressing climate change, they see electric vehicles as a realistic and viable path forward. According to a nationally-representative survey conducted in 2020 by Consumer Reports, 71% of American adults with a valid driver’s license are interested in purchasing an electric vehicle at some point, while 31% said they would consider getting an electric vehicle for their next lease or purchase. These numbers have been on a steady climb for years, and will likely continue as more consumers become environmentally conscious.
Whether or not they are a signatory of the agreement, car manufacturers recognize the shifting market demand for electric vehicles. In fact, many of the major companies that did not sign the agreement are still phasing in electric vehicles, albeit slowly. The pressure from signatory automakers in combination with a shifting global market will likely push absent automakers to phase in sooner if they want to remain competitive.
Second, the commitment from major countries will likely further pressure car manufacturers into accelerating a phase-in of electric vehicles. It is often the case that either the private sector is the catalyst for change in policy, or policy is the primary driver of change in the private sector. In this case, it is both. With the convincing advancements in electric vehicle capabilities in recent years due to private investment and research and development efforts, governments now see that it is possible to implement increased standards. In other words, if the private sector were not able to demonstrate electric vehicle capabilities, the public sector would not implement targets that could not be reached.
Now that the private sector has proven these targets to be realistic, governments can now provide the healthy push needed to accelerate the transition to fully electric vehicles. The thirty-eight countries that signed the agreement are doing just that by banning the sale of all non-electric cars. At the very least, this agreement is a strong signal to all major car manufacturers to accelerate the transition to fully electric if they want to avoid losing access to those markets. As more countries begin to implement stricter regulations, major automakers will need to accelerate their transition to remain competitive. Other policy tools such as increased subsidies to drive down electric vehicle prices and increased public investments in charging infrastructure can also be utilized by governments to further incentivize a rapid transition.
Overall, while this agreement at a first glance simply appears to be more rhetoric, it is a larger step forward than most may think. The current commitment from governments and automakers, however, is far from enough to limit the global temperature rise below the target 1.5 degrees Celsius. To help meet this goal, accelerating the phase-in of electric vehicles and a phase-out of internal combustion engines is a must. To do so, progressive governments and forward-looking companies must continue to pressure the key stakeholders absent from this agreement. Hopefully this year’s COP27 in Egypt will see more stakeholders join the cause.