Technology is driving the future of most industries, but sustainability is taking the front seat in the automotive industry. The spotlight is on the world’s fourth-largest automobile market, valued at more than USD 100 billion. India is undergoing a multidimensional transformation, and auto manufacturers must balance consumers’ expectations, environment-friendly manufacturing, complex regulations, and global competitiveness.
However, achieving sustainability in the automotive industry (especially in India) will be more than reducing carbon footprint. Hidden challenges and a lack of awareness will make it challenging to become carbon-neutral by 2070. In this blog, we’ll explore those challenges and initiatives that help overcome them.
A Walkthrough of India's Sustainability Goals in the Auto Sector
India is taking the sustainability challenge seriously, and to show its commitment, it has set targets for a greener future.
- By 2030, India wants to achieve its sales goal in both light and commercial vehicle sectors. It has set a target of 30% sales of battery electric vehicles (BEV), 70% and 80% for commercial vehicles, and two or three-wheelers, respectively.
- 30-45% less carbon emission with fuel-efficient technologies by 2030.
- In the next six years, India wants to be less dependent on fossil fuels and use renewable energy sources by 50%.
- By 2040, India aims to completely replace conventional internal combustion engine vehicles and make all vehicles electric.
- Introduce biofuel blended engines by 2025 and achieve net zero targets by 2070.
Pragmatic Steps Toward the Future of Automotive Industry
BS6 emission norms, faster adoption and manufacturing of hybrid and electric vehicles (FAME II), and a real driving emission cycle (RDE) are a few measures taken to achieve the above targets. In addition to these steps, the government has mandated manufacturers to follow corporate average fuel efficiency norms (CAFE2).
Challenges Ahead in the Path of Automotive Sustainability
India’s strong commitment to automotive sustainability will not ensure a smooth transition toward a green future. Challenges will always exist.
1. Long-Term Viability
Achieving sustainability in the automotive industry is not a one-time goal; it’s a forever commitment. Auto manufacturers can fail to achieve this without strategic planning that covers every aspect, from consumer preferences and environmental factors to technology adoption.
2. Balancing Cost with Sustainability
Electric vehicles are transforming the future of the automotive industry, but they are expensive. On the one hand, manufacturers will need to invest more in implementing green technologies, and on the other hand, they need to balance vehicle prices to increase sales.
However, the lack of charging stations, service options, expensive batteries, and a low driving range will make consumers hesitate to buy electric vehicles, restraining their manufacturing.
Cost estimation tools like Cost It Right are vital in assessing manufacturers’ ability to reduce costs and balance sustainability. For more information, please visit our product features or consult our experts.
3. Global Automotive Standards
Manufacturing vehicles of subpar quality while meeting industry standards is also a hurdle in this green initiative. Auto manufacturers should meet both domestic and global standards to expand their growth.
4. Complex Supply Chain
The multi-tier suppliers make sustainability a difficult goal to achieve. Smaller ones need more resources or infrastructure to adopt greener practices, while others might need more awareness. This difference and lack of standardization in extracting raw materials to final assembly demand improvements.
5. End-of-Life Vehicle
The production and disposal of green vehicles also require careful consideration. The automotive industry must prioritize recycling vehicle components and safe disposal in the environment.
6. Data Collection
Capgemini Research Institute in their 2022 report on the automotive industry said, data will be a significant hurdle in achieving sustainability. Manufacturers struggle to integrate sustainability into daily operations and establish KPIs for tracking progress. Limited transparency in the supply chain further complicates data collection and linking sustainability goals with regular activities.
AI is helping automotive manufacturers to overcome this challenge through its powerful analytics capabilities. From predictive analytics to predictive maintenance, there are several ways AI is benefiting the industry.
Key Sustainable Practices and Initiatives
1. Circular Economy
To achieve comprehensive sustainability goals, manufacturers should embrace circular economy principles. This includes using recycled materials, designing vehicles that are easy to disassemble, and optimizing production processes.
In 2021, a vehicle scrappage policy was launched to reduce pollution and the need for new raw materials for manufacturing. As per the policy:
- Unworthy and old vehicles ( more than 15 years in the commercial category and 20 years in the private category) are pulled from the market.
- Higher green tax will be levied on such vehicles to encourage consumers and manufacturers to discontinue older vehicles.
- Consumers with scrapping certificates will receive a discount and waiver in registration fees when purchasing new vehicles. An additional road tax rebate will further encourage consumers to have older vehicles.
2. Carbon Neutral Initiatives
The Government of India has launched green initiatives to reduce carbon emissions, from the manufacturing of vehicles to their use on the road. BS-VI norms, effective from April 2020, impose strict regulations on particulate matter and encourage manufacturers to use diesel particulate filters in their vehicles. Making compressed biogas available to everyone is another initiative promoting a cleaner and greener future for the automotive industry.
3. Green Design and CAFE Norms
Sustainability begins with rethinking the manufacturing design principles and shifting towards more greener and energy-efficient materials. Bio-based materials and recycled fabrics for interiors and exteriors will become the new normal.
However, due to CAFE norms, this will not be a choice but a necessity. Corporate Average Fuel Economy (CAFE) will drive both innovation and sustainability in the automotive industry. It mandates manufacturers to produce vehicles with high fuel efficiency, which means low CO2 emissions.
For Phase 3, manufacturers must focus on fleet-wide efficiency rather than individual vehicles. This will allow them to adopt technologies such as hybrid vehicles and AI that help in predictive analytics and maintenance.
Conclusion
Sustainability is the future of the automotive industry. However, greener initiatives are easier said than done. The complex nature of the industry, lack of awareness, investment, and strict regulations can make it harder to achieve. However, government policies, green technologies, and continuous innovation can help manufacturers overcome these challenges.
