You read that right. Thanks to its explosive expansion and planned car plant in China India, Tesla Inc. It is in the process of increasing the total amount of its emissions – the most inevitable consequence of growth in our current carbonized world – but every vehicle of its own also increases pollution.
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Car manufacturers’ emissions are not just a product of the energy they consume in their factories – they are the result of pollution, which they emit when they encircle their products. Thanks to all the gasoline and diesel burned during the lifetime of the cars they sell, the Volkswagen AG oil producer is responsible for more greenhouse gases than Total SE. Toyota Motor Corporation’s footprint surpasses BP PLC (1). Cummins Inc., which makes engines for commercial vehicles, owns more than ExxonMobilCorp.
Electric vehicles sold by Tesla have a significant advantage over that front. As my colleagues Liam Denning and Elaine wrote, they are very effective at converting production energy into vehicle energy, even on coal-heavy grids like China they are more efficient than gasoline-like ones.
However, the differences from one country to another are significant.
Take the European Nonprofit Transport & Environment Product Lifecycle Emission Calculator dedicated to zero-carbon transportation. The current-model large car with an average European Union-produced and charged battery emits 88 grams of CO2 per kilometer, compared to the equivalent of 284 grams of petrol-powered. In a country with a low carbon grid like Sweden or France, it drops to 50 grams or less.
If you use a proxy for a high-emission grid in China or India, the picture will change significantly. A car made in China and charged in Poland contains two-thirds of the electric alloy of coal, similar to that in China and India, weighing 193 grams per kilometer.
An important aspect of the weather potential of electric vehicles is that they will be able to switch to low-carbon fuels during their lifetime, as heavily emitted power plants will be disconnected from the grid and replaced with renewable energy. That process is likely to happen much faster in developed countries – but in two countries where Tesla hopes to catch up with China and India, it will be unusually slow.
As a result, as Tesla sells more cars in China and India, the intensity of its emissions – emissions per vehicle sold or dollar revenue – increases.
Maybe it doesn’t matter. Any electric vehicle sold anywhere in the world can be an alternative to those that run on petrol or diesel. Weather requirements are to increase the market share of battery-powered vehicles to the traditional ones. That means it still sells a lot in markets where the immediate greenhouse benefits are lower than those in the US and Western Europe, which is still balanced.
However, this is information that climate-focused investors who drive Tesla’s stock prices so much should give, so they can make their own decisions about how their shareholders will reflect their own emission-reduction commitments.
Not so at Tesla. This not only exposes Scope 3 emissions (the dominance of emissions from the cars it sells), it also does not expose Scope 1 (from on-site electricity consumption) or Scope 2 (from purchased electricity). It does not even reveal its power consumption, and its behavior indicates, for all rhetoric, that it is certainly not a priority. Four years after production began at the Gigafactory battery plant in Nevada, solar panels are still being gradually added to cover its roof and help it remain independent of Nevada’s gas-fired grid.
Companies that make products to speed up the transition to clean energy may be better than a substitute when providing their own carbon footprint documentation – offering only ideal historical statements but only vague guarantees of how their net-zero commitments are going to be fulfilled.
However, a clean-energy business with a market cap equivalent to the S&P 500’s total oil and gas sub-index must have the ability to generate information that will help investors raise their minds. Tesla’s slapdash emissions stain on otherwise impressive record. A company that promotes solar energy should not hide the footprint of its own activities in the shade.
This column does not reflect the opinion of the editorial board or Bloomberg LP and its owners.
David Fickling is a Bloomberg opinion columnist who covers industrial as well as consumer organizations along with goods. He has worked as a reporter for Bloomberg News, the Dow Jones, the Wall Street Journal, the Financial Times and The Guardian.