Tesla's greenhouse gas emissions increased by nearly 10 million metric tons of CO2 last year, according to the company's latest report. impact reportwhich offers the most revealing insight yet into how the company thinks about climate-related risks and its own carbon footprint.
In 2023, Tesla was responsible for more than 50 million metric tons of carbon dioxide emissions, compared to just under 42 million metric tons the previous year, a roughly 20 percent increase in pollution. Most of the additional pollution comes from Tesla's supply chain. The goods and services it purchased account for nearly 80 percent of the company's total carbon footprint.
The report says Tesla is working to achieve net-zero greenhouse gas emissions “as soon as possible” and outlines the steps the company plans to take to achieve it. It also mentions some of the biggest risks the company faces as a result of climate change. However, it shows that the company's supply chain has become dirtier over the past year.
The company's supply chain has gotten dirtier over the past year.
Since dirty supply chains often account for the majority of a company's carbon footprint, environmental advocates are pushing regulators to crack down on those emissions. It appears that Tesla is already taking steps to comply new rules from the Securities and Exchange Commission that require much more transparency around climate change.
The SEC's initial proposal in 2022 would have required large companies to disclose so-called indirect emissions from their supply chains and the use of their products. But that faced immediate backlash from companies who said those were the most difficult emissions to control. The measure was eventually removed from climate rules that the SEC finalized in March.
Under those rules, which already face challenges in court, large companies will still have to disclose data on carbon pollution from their direct operations and energy use that is “material” or essential for investors to understand their financial condition. a company. They will also need to assess and share the risks and impacts they face as a result of climate change.
Tesla conducted a sustainability assessment in 2023 “to determine areas important to the business and salient to society and the environment,” the report says. This resulted in a list of 20 “focus areas,” including climate risk management, air quality, water use, “responsible” ai, the health and safety of its workers, and more.
Drought poses biggest risk to Tesla's business in the short term
There is even an entire section in the report dedicated to climate risk. Drought poses the biggest risk to Tesla manufacturing in the short term, he says, while heat becomes a bigger problem in the long term. After all, Tesla operates several facilities in California, Nevada and Texas, all arid Western states struggling with rising temperatures and increasingly stressed water systems. The company says it assesses climate risks at each of its manufacturing facilities, including flooding, heavy rain, high winds, extreme heat, wildfires and drought. Those assessments will inform any plans to expand sites or design new facilities, he says.
Tesla also acknowledges in the report that it may have to change the way it does business to reduce its carbon emissions. “As regulations around GHG emissions management evolve, we may need to make additional capital investments that are different or accelerated relative to existing plans, which may impact profitability. “Policy changes may affect certain practices or infrastructure, potentially reducing installed capacity because the technology used, such as die casting or paint shop, cannot be fully decarbonized,” the report says.
The company, of course, faces a host of problems beyond climate change. Its sales, stock price and staff have all declined this year. Therefore, it will not be easy for the company to blame the lower profits on efforts to comply with climate policy.
While its carbon footprint has increased over the past year, Tesla says that doesn't take into account the pollution avoided when consumers switch from internal combustion engines to electric vehicles. Its customers avoided 20 million metric tons of CO2 pollution in 2023, Tesla estimates. And compared to gas-guzzling automakers, Tesla's carbon footprint is still much smaller. By comparison, Ford's carbon footprint is more than seven times larger in 386 million metric tons of CO2 in 2023.
Tesla claims that typical greenhouse gas accounting methods “were not created for a company like Tesla” that makes products including electric vehicles, solar panels and batteries that displace fossil fuels. The figures for its greenhouse gas emissions are hidden in the appendix of the report without adding the items to show the total of its carbon footprint. First, the company focuses on comparing the lifetime emissions of its electric vehicles with those of internal combustion engine vehicles.
Ultimately, you can't manage what you can't measure. The data Tesla has begun sharing about its operations will be crucial to holding it accountable to its vision of reaching net-zero emissions. There's even more vital information the company needs to share if it's serious about climate change: a concrete timeline for its efforts to reduce pollution.
This appears to be the first time Tesla has said in a report that it “strives to achieve net-zero GHG emissions across our product's entire life cycle, from mining and production to end-of-life use and recycling.” useful”. The report also says the company plans to match 100 percent of electricity use for its operations with renewable energy. (It already does this for its Supercharger network.) But the company has not set a deadline for those goals and did not immediately respond to questions from The edge.
