The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Tuesday, May 4, 2021

Strategic CSR - EVs

I was always aware that simple statements around the 'obvious benefits' of electrical vehicles (EVs) were obscuring a much more complex reality (where EVs are ultimately more beneficial for the environment, but not immediately so). The interactive article in the url below provides some data to support that position:

"Carmakers including General Motors Co. and Volkswagen AG are retooling their companies to make electric vehicles on the premise that their battery-powered motors are cleaner than gas-burning engines. Are EVs really better for the environment, though? A close look at all the factors shows they are—but it's a complex answer with some asterisks."

In order to answer this question, there are a number of factors that need to be taken into account:

"The environmental cost of a car includes both building it and fueling it. That means factoring in emissions associated with oil drilling and power plant smokestacks, as well as from mining metals such as nickel and cobalt that are needed for electric-car batteries."

In short, right off the production line:

"Building both a Tesla Model 3 and a Toyota RAV4 generates several tons of greenhouse gas emissions to smelt the aluminum, manufacture the components and assemble the vehicle. But building a Tesla actually generates more emissions because of the metals needed for its lithium-ion battery. Before it rolls off the assembly line, the Tesla has generated 65% more emissions than the RAV4."

After a few thousand miles, however, the Tesla begins to catch-up:

"The RAV4 burns gasoline, which is refined from crude oil extracted from wells around the world. At 5,000 miles, the RAV4 also needs its first motor oil change. The Tesla refills with electricity, and doesn't need motor oil changes. Generating electricity creates emissions, but the U.S. grid is getting cleaner each year, burning less coal and using more renewables and natural gas."

The study concludes that it is only after being driven for 20,600 miles that the Tesla becomes the more sustainable option:

"For every mile driven, generating the electricity for the Tesla emits 34% of the emissions associated with making and burning the gasoline consumed in the RAV4 engine. At 20,600 miles, the greenhouse gas emissions from building and driving the two cars are roughly the same. … Then the Tesla pulls ahead."

Finally, after what the article refers to as "the lifespan of a typical car," the Tesla far outshines the RAV4:

"By the time we get to 200,000 miles, ... Building and operating the RAV4 has generated 78 tons of greenhouse gases. The Model 3 has generated less than half: 36 tons. The Model 3 also comes out ahead in Consumer Reports's total cost of ownership, at $49,800 to $51,000."

 

So, according to this study, the Tesla is not only the overall better environmental option than the RAV4, but is also more cost-effective. Presumably, this comparison would be even more favorable for the Tesla if the other car was larger and heavier than a RAV4. The study also goes on to examine what would happen in four different scenarios in terms of the speed in which that transition occurs for all cars currently on U.S. roads ("more than 280 million light-duty vehicles"). Perhaps not surprisingly, the most effective results come when multiple complementary policy changes are made with the common goal of reducing our carbon footprint:

 

"No matter what kind of engines they run on, cars add to greenhouse gas emissions. But the data show that switching from gas to electric vehicles will make a huge impact. Consumers making individual choices between cars will make a difference. So will policy decisions made by governments and investments by companies as we drive into the future."


Take care

David


David Chandler

Strategic Corporate Social Responsibility: Sustainable Value Creation (5e)

© Sage Publications, 2020


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Are Electric Cars Better for the Environment?

By Russell Gold, Jessica Kuronen and Elbert Wang

March 23, 2021

The Wall Street Journal

Late Edition – Final

A8

https://www.wsj.com/graphics/are-electric-cars-really-better-for-the-environment/