Executive summary

The priority study area for this report is The European Green Deal. The key conclusions of
this paper will discuss the challenge facing the automobile sector in regard to the
aforementioned European priority and some possible solutions. Some of the ideas for the
green agreement that will be offered include a carbon offset program, sustainable fuel, and
technological advancements.

Introduction

There is already widespread agreement that greenhouse gas (GHG) emissions must

be reduced. As a result, the European Commission has unveiled a number of long-

term low-carbon policy initiatives and investigated ways for important industries like

transportation and power to reach GHG emission reductions of 80% to 95% by 2050

compared to 1990 levels (European Commission, 2015). The transportation industry

must cut its GHG emissions by 54% to 67% in 2050 as one of the key elements

(European Commission, 2023). Presently, road transportation accounts for

approximately 70% of all GHG emissions in Europe, with the sector as a whole

producing about 25%. (European Commission, 2016). This demonstrates the crucial

part that creative and environmentally friendly road transportation strategies play in

low-carbon mobility. Battery-powered electric vehicles (EVs) are among them. One

of these measures is the use of electric vehicles, including battery electric vehicles

(BEV) and plug-in hybrid electric vehicles (PHEV). Even though BEVs may have

high indirect emissions, European law nevertheless considers them to be zero-

emission vehicles (Jochem et al., 2015).

The European Union's Green Deal has set ambitious goals to achieve climate neutrality by

2050. The transportation sector is a significant contributor to greenhouse gas emissions and

therefore, the transition to electric vehicles (EVs) is a priority for achieving these goals. The

automotive industry is the key player in this transition and must take a leadership role in the

development and production of EVs.

EVs are vehicles powered by electricity rather than fossil fuels. They are significantly more
energy-efficient and emit fewer greenhouse gases than traditional gasoline or diesel-
powered vehicles. However, there are several challenges associated with the widespread
adoption of EVs, including limited charging infrastructure and high upfront costs.

To encourage the transition to EVs, the EU has implemented several policies and initiatives,
including subsidies and tax incentives for EV buyers, regulations mandating the installation
of charging infrastructure, and the establishment of research and development programs to
advance EV technology. These policies have helped to increase the adoption of EVs in the
EU, with sales of EVs increasing steadily in recent years.

The shift towards EVs has significant implications for the automotive industry. Traditional
automakers are facing increased competition from new entrants in the EV market, and there
is a growing demand for EV-related jobs and skills. The transition to EVs also requires
significant investment in charging infrastructure and battery technology.

In conclusion, the EU's Green Deal prioritizes the transition to EVs as a key solution for
reducing emissions in the transportation sector. The automotive industry has a critical role to
play in achieving these goals and must continue to invest in research and development to
advance EV technology. The EU's policies and initiatives have helped to increase the
adoption of EVs, but further support is needed to ensure a smooth and sustainable transition
to a low-carbon transportation system.

Automotive Industry and Green Deal

The automotive industry is a critical sector that significantly impacts the global
economy, environment, and society. The sector has been grappling with
sustainability challenges, including resource depletion, pollution, and climate change.
In response, the European Union (EU) has prioritized green deal policies aimed at
decarbonizing the automotive sector, promoting the use of electric vehicles (EVs),
and reducing greenhouse gas emissions. This report provides a literature review on
the automotive industry, EVs, and the EU green deal priority, focusing on
sustainability perspectives. The automotive industry is a significant contributor to
global emissions, with over one billion vehicles emitting an estimated 8.7 billion
metric tons of CO2 annually (Moltesen & Stanciulescu, 2021) and on a global scale,
approximately 17% of global greenhouse gas emissions come from the
transportation sector.

(https://www.statista.com/statistics/241756/proportion-of-energy-in-global-
greenhouse-gas-emissions/). In Ireland the transport industry was responsible for
%17.7 of Ireland’s greenhouse gas emissions in 2021 according to Environmental
Energy Agency. (https://www.epa.ie/our-services/monitoring--assessment/climate-
change/ghg/transport/#:~:text=Between%201990%20and%202021%2C
%20Transport,road%20transport%20increasing%20by%20115.2%25. )
The sector has also been associated with other sustainability challenges, such as
energy and resource depletion, air and noise pollution, water pollution, biodiversity
loss, and safety concerns.

1. Distribution of greenhouse gas emissions worldwide in 2019, by sector

When we look at the economic dimension of the automobile industry in the

European Union; the automotive industry provides 6% of total employment and
generates 7% of GDP. In 2021, the European Union exported 5.7 million vehicles,
generating €74 billion in revenue. The automotive industry employs 3.5 million
people. Within the scope of employment, 1.2 million people are involved in the
assembly line, 1.4 million in the automotive supply chain, and the rest in the
production of parts such as tires and shafts. The automotive sector also draws
attention as the area where the EU's largest R&D expenditures are made.

Considering the extent of its environmental damage and its large share in the
European Union economy, the automobile sector is one of the priority sectors under
the Green Deal policies. With the transition to electric vehicles, it can be the sector
that makes the most difference in environmental regulations among other sectors in
a shorter time. As a result, given the commercial volume of the automobile industry,
the number of people employed, and its impact on the environment, it is a topic
worth analyzing under the Green Deal heading of the European Union Commission.

Automotive Industry Analysis

The automotive industry has been a major contributor to global economic growth
over the past century. However, the industry's reliance on fossil fuels has led to
significant environmental challenges, including air pollution and climate change. The
EU Green Deal Priority sets out an ambitious goal of achieving carbon neutrality by
2050, and the automotive industry has a critical role to play in achieving this target.
The transition towards electric vehicles (EVs) is a key part of this effort, as they are
cleaner, more efficient, and less harmful to the environment than traditional internal
combustion engine (ICE) vehicles.

The automotive industry is facing pressure to reduce its carbon footprint, and the
transition towards EVs is one of the key solutions. According to the International
Energy Agency (IEA), the number of EVs on the road is projected to reach 145
million by 2030, up from 11 million in 2020 (IEA, 2020). This growth is driven by a
combination of factors, including government policies and incentives, technological
advancements, and changing consumer preferences.

The year 2020, when the Covid 19 pandemic was more severe, was a breakthrough
year for the automotive industry. Demand for vehicles and vehicle production
capacity dropped significantly due to travel restrictions and disruptions in supply
chains. With the effects of climate change becoming more evident, it became clear
that the production of vehicles based on fossil fuels is no longer sustainable in the
medium and long term. During Covid-19, demand for internal combustion engine
vehicles has shrunk significantly, with sales of electric vehicles reaching 16.5 million
in 2021.

Europe has a strong automotive industry and a robust regional supply chain to
support it. The innovation capacity and know-how of the EU automotive sector
increase its competitiveness in the international arena. Comprehensive and
consistent legal regulations in the EU regarding the automotive sector facilitate
strategic decision-making for actors in this sector. Research centers, universities,
and training centers in the EU make significant contributions to R&D activities.

One of the weaknesses of the European Union is the low number of start-ups in the
automotive sector compared to the US and China. Tesla, Lucid, and Nio make it
difficult for new entrants to enter the sector. In the battery sector, the number of start-
ups in the EU is relatively high.

If the entry of new semiconductor manufacturers into the sector is taken as a

barometer, 22,000 new companies registered in China in 2020. In the EU, the
appetite for the investments required to compete with China on all-electric vehicles is
diminishing, as policies for PHEVs in the EU are somewhat softer.

New regulatory rules and the maturation of technologies in EVs increase the
competitiveness of EVs on the market between 2025 and 2030. All European car
manufacturers have announced their targets for electric vehicles for the coming
period. Volkswagen is leading the way.

Current Status

The European Union's Green Deal aims to achieve climate neutrality by 2050 and reduce
greenhouse gas emissions by at least 55% by 2030 (weforum, 2021). One of the key areas of
focus in the Green Deal is the transition to electric vehicles (EVs), which produce lower
emissions than traditional fossil fuel-powered vehicles. As a result, the automotive industry is
facing significant pressure to transition to EVs to meet the targets outlined in the Green Deal.
Currently, the automotive industry is making progress toward this goal, with many major
manufacturers investing heavily in the development of EVs. According to the European
Automobile Manufacturers' Association (ACEA), sales of EVs in Europe increased by 137%
in 2020 (Europe Electric Vehicle Market 2022-2027 | February 2023 Updated, n.d.), despite
the overall decline in the automotive market due to the COVID-19 pandemic.

To support the transition to EVs, the EU has implemented a range of policies and incentives,
such as the EU Emissions Trading System (ETS) and the Alternative Fuels Infrastructure
Directive, which aim to encourage the adoption of EVs and increase the availability of
charging infrastructure. Additionally, the EU has set emissions targets for new cars and vans,
which will require manufacturers to significantly reduce the emissions of their fleets.

However, there are still challenges facing the automotive industry to the Green Deal. One of
the main challenges is the need for significant investments in research and development to
improve the range and affordability of EVs. Additionally, the development of charging
infrastructure remains a challenge, particularly in rural areas and in countries with lower
levels of EV adoption. Finally, the transition to EVs will require significant changes to the
manufacturing process, which could be costly and require retraining the workforce.

● High costs remain a significant barrier to the adoption of EVs. While the cost of
batteries has declined in recent years, EVs remain more expensive than traditional
internal combustion engine (ICE) vehicles (IEA, 2020). This has limited the market
for EVs, particularly in low- and middle-income countries. High Cost of Batteries.
Additionally, the production of batteries is energy-intensive and can have a significant
environmental impact. To address this challenge, the EU could invest in research and
development to reduce the cost of batteries. This could involve the development of
new battery chemistries or the optimization of existing battery technologies.
Additionally, the EU could provide financial incentives for the development of battery
production facilities in the EU, which would help reduce the cost of batteries by
reducing transportation costs. Finally, the EU could introduce a carbon tax on the
production of batteries, which would incentivize manufacturers to reduce their carbon
footprint and promote the development of more sustainable battery technologies.
● Another challenge for the automotive industry is the need to transition to sustainable
manufacturing practices. The production of EVs requires the use of rare earth metals
and other materials that can have negative environmental impacts if not mined and
processed sustainably. Additionally, the manufacturing process for EVs must be
energy-efficient and produce minimal waste to meet the goals of the EU Green deal.
 ● Limited charging infrastructure is another challenge facing the EV market. The lack
of charging stations has limited the range of EVs and made them less convenient for
long-distance travel (Sierzchula et al., 2018). While the deployment of charging
infrastructure is increasing, it remains insufficient in many areas. In addition, the
existing charging infrastructure is fragmented, with different charging standards,
making it difficult for EV users to find a charging station that is compatible with their
vehicle. To address this challenge, the EU must invest in the expansion of the
charging infrastructure. This could involve the installation of more charging stations,
particularly in areas where there is currently limited coverage. Additionally, the EU
could incentivize the private sector to invest in the development of charging
infrastructure by providing tax breaks and other financial incentives. To address the
issue of compatibility, the EU could develop a common charging standard, which
would make it easier for EV users to find a charging station that is compatible with
their vehicle.
● The limited range of EVs is another significant challenge facing their adoption.
Currently, the range of most EVs is between 150 and 250 miles, which is significantly
less than the range of conventional vehicles. This has made EVs unsuitable for long-
distance travel, which has limited their appeal to consumers. To address this
challenge, the EU could invest in research and development to increase the range of
EVs. This could involve the development of new battery technologies, such as solid-
state batteries, which could provide significantly longer ranges. Additionally, the EU
could invest in the development of charging infrastructure that is capable of providing
fast charging, which would reduce the time required to charge an EV and make it
more convenient for long-distance travel.

● Uncertain environmental benefits are also a challenge facing the EV market. While
EVs produce fewer emissions than ICE vehicles, the production of batteries and the
generation of electricity used to power them can result in significant environmental

Despite these challenges, the automotive industry is making progress toward meeting the
goals of the EU Green Deal, and there are many opportunities for the industry to thrive in a
more sustainable and environmentally friendly economy. By transitioning to EVs and
investing in sustainable manufacturing practices, the industry can reduce its environmental
impact and remain competitive in a changing market.

● impacts (Herrera et al., 2019). The environmental benefits of EVs are highly
dependent on the source of the electricity used to charge them.
● Policies and incentives have been established to overcome these challenges and drive
the adoption of EVs. The EU has established a range of policies and incentives,
including the deployment of charging infrastructure, incentives for EV purchases, and
regulatory standards for vehicle emissions (European Commission, 2020). The EU's
 Clean Mobility Package, which aims to reduce emissions from the transport sector by
60% by 2050, provides a roadmap for the transition towards a sustainable transport
system (European Commission, 2018).
● Overall, the transition to EVs presents significant challenges for the automotive
industry in meeting the goals of the EU Green deal. However, by investing in research
and development, implementing sustainable manufacturing practices, and working to
address consumer concerns, the industry can overcome these challenges and help to
build a more sustainable future.

Trends and developments in electric vehicle markets – Global EV Outlook 2021 – Analysis -
IEA

OPPORTUNITIES

The transition to electric vehicles (EVs) is a key aspect of the EU Green deal, and there are
several opportunities that the automotive industry can capitalize on as a result of this
transition. Some potential opportunities include:

Market growth: The transition to EVs is likely to lead to significant market growth for the
automotive industry. As consumers increasingly adopt EVs, demand for these vehicles is
likely to increase, leading to new business opportunities for automotive manufacturers.

Innovation: The development of new EV technologies presents an opportunity for automotive

manufacturers to innovate and differentiate themselves from competitors. Manufacturers that
are able to develop new and improved EVs may gain a competitive advantage in the market.

Cost savings: The transition to EVs can also lead to cost savings for automotive
manufacturers. As production processes become more efficient, manufacturers may be able to
reduce costs associated with manufacturing and maintenance.

Positive brand image: Adopting sustainable practices, such as the production of EVs, can
improve a company's brand image and reputation, leading to increased consumer trust and
loyalty.
Compliance with regulations: The EU Green deal sets ambitious targets for reducing
greenhouse gas emissions, and the transition to EVs is a key component of achieving these
targets. Automotive manufacturers that are able to comply with these regulations may be
better positioned to succeed in the market.

Overall, the transition to EVs presents significant opportunities for the automotive industry in
the context of the EU Green deal. By capitalizing on these opportunities, manufacturers can
position themselves as leaders in the transition to a more sustainable and environmentally-
friendly economy.

Challenges

● The shift toward electric cars will, without a doubt, be fraught with its fair share of
difficulties. The cost of batteries, which are now the most costly component of
electric cars, is the most major obstacle that has to be overcome.

● Also, there is a lack of widespread availability of charging infrastructure, which

makes it difficult for customers to charge their cars.

● In addition, the manufacturing of electric cars necessitates the use of more

difficult processes and more advanced technology, both of which contribute to an
increase in price.

Benefit

● The shift toward electric cars presents a number of opportunities, notwithstanding

the obstacles it must overcome.
 ● Electric cars are superior to their gasoline and diesel counterparts in terms of
energy efficiency as well as pollution levels. This helps to lessen global warming
as well as the pollution of the air we breathe.

● They are much less noisy than their gasoline-powered counterparts, making them
far more pleasurable to pilot.

● Finally, electric cars offer reduced long-term expenses of ownership since they
need less maintenance and use less gasoline than conventional automobiles.

Finally, the transition to electric cars is perfectly matched with the objective of decarbonizing
the transportation sector that is outlined in the EU Green Deal. This shift will bring about a
number of positive changes, like enhanced energy efficiency, enhanced air quality, and
decreased emissions; yet, it will also bring with it its own unique set of obstacles.
Nonetheless, moving toward electric cars is essential in order to accomplish the lofty goals
set by the EU and to secure a future that is environmentally friendly.

Conclusion

In order to satisfy the aim of the EU Green Deal to decarbonize the transportation sector, the
automobile industry is now in the middle of a massive shift toward electric cars. This shift
will bring about a number of positive changes, like enhanced energy efficiency, enhanced air
quality, and decreased emissions; yet, it will also bring with it its own unique set of obstacles.
The transition to electric cars, its connection with the EU Green Deal agenda, the
accompanying obstacles and advantages, and a conclusion will be covered in this executive
report.

For automobile companies to fulfill the requirement of the EU Green Deal aim of reducing
carbon emissions in the transportation sector, the automobile industry is now making the
switch to electric cars. This shift is being propelled by a number of causes, including the need
to cut emissions and enhance air quality, as well as the growing availability of electric cars
and the declining cost of battery technology. The European Union (EU) has also established
some ambitious goals for the transition to electric vehicles, such as increasing the number of
electric vehicles on the road to at least 30 million by the year 2030 and ensuring that all
newly sold cars in the EU are zero-emission vehicles by the year 2035.

As a result of its ability to cut emissions while simultaneously improving energy efficiency,
the shift toward electric cars is well suited to fulfill the goal of the EU Green Deal. Also, it
presents a chance for the automotive sector to develop new technologies and, in the process,
generate new employment opportunities. In addition, electric cars are less expensive to
purchase and need less money to maintain than conventional vehicles, which makes them a
more appealing choice for customers.

Referencing + Bibliography – needs to be added

Challenges +Opportunities + Costs + Benefits – review this section – there is some repetition
and some points are introduced but not supported by reference to sources or evidence.

Ensure that you give examples where appropriate – see comments on report

The Introduction and section on the Auto industry is generally sound