How Car Manufacturers Are Advancing Toward Net-Zero Emissions: Strategies, Challenges, and Opportunities

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Understanding the Drive Toward Net-Zero Emissions

The automotive sector is under intense pressure to reduce its environmental impact, with car manufacturers globally pledging to achieve net-zero greenhouse gas emissions by mid-century. Achieving net-zero means reducing and offsetting emissions across the entire vehicle lifecycle-including manufacturing, logistics, product use, and end-of-life recycling. This commitment is not just about meeting regulatory requirements, but also about addressing consumer demand, investor expectations, and the escalating risks of climate change.

Core Strategies for Achieving Net-Zero

Automakers are implementing multifaceted strategies to reach net-zero goals. The primary approaches include:

Electrification of vehicle fleets : Rapidly expanding the range of battery electric vehicles (BEVs), plug-in hybrids (PHEVs), and, to a lesser extent, hydrogen fuel cell vehicles (FCEVs).
Supply chain transformation : Engaging suppliers to reduce embedded emissions from materials like steel, aluminum, and batteries.
Innovative manufacturing and logistics : Decarbonizing production facilities, optimizing logistics, and adopting renewable energy sources.
Embracing the circular economy : Increasing recycling, reusing components, and integrating sustainable materials throughout the product lifecycle.

Electrification: The Main Decarbonization Strategy

For most car manufacturers, electrification is at the heart of their net-zero journey. Companies like Toyota and Stellantis have set ambitious targets to transition away from internal combustion engine vehicles. Toyota, for instance, aims for carbon neutrality across its vehicle lifecycle by 2050, with all global manufacturing facilities targeted to be carbon neutral by 2035. The company is investing in BEVs and FCEVs while continuing to promote hybrids during the transition phase [1] .

Stellantis has pledged to achieve net-zero carbon emissions by 2038, focusing on aggressive electrification, advanced battery technologies, and new mobility solutions. Their approach extends beyond vehicle sales, encompassing the entire value chain [2] .

However, electrification alone is not a panacea. The production of EVs, particularly their batteries, can generate higher initial emissions compared to traditional vehicles. This underlines the importance of decarbonizing supply chains and adopting circular business models [5] .

Supply Chain and Material Innovation

Decarbonizing the automotive supply chain is critical for achieving net-zero. Leading manufacturers are:

Partnering with suppliers to source near-zero steel and aluminum
Improving transparency and emissions reporting
Focusing on battery production emissions and EV efficiency

Ford and General Motors, for example, have made initial commitments to procure low-emissions steel and aluminum. Yet, broader adoption of these practices and more robust targets are needed across the industry [4] .

Manufacturing, Logistics, and Circular Economy

Major automakers are decarbonizing their manufacturing plants and logistics networks. Toyota has a science-based target to reduce operational greenhouse gas emissions by at least 68% compared to 2019, aiming for all manufacturing facilities to be carbon neutral by 2035 [1] . Stellantis focuses on responsible energy management and pioneering real estate management for its industrial sites [2] .

Adopting a circular economy is another key strategy. Automakers are:

Increasing the use of recycled and renewable materials
Designing vehicles for easier disassembly and recycling at end-of-life
Developing remanufacturing and component reuse programs

These approaches help reduce the environmental impact of vehicle production and disposal, and lower the overall carbon footprint of the industry [5] .

The Role of Science-Based Targets and Industry Standards

Credible net-zero strategies require robust, science-based targets. Organizations like the Science Based Targets initiative (SBTi) are developing sector-specific standards to guide automakers. The new SBTi Automotive Sector Net-Zero Standard, now under consultation, will provide a comprehensive framework for emissions reductions across Scopes 1, 2, and 3-covering direct operations, purchased energy, and entire supply chains [3] .

Companies are encouraged to participate in this process and align their targets with the latest scientific guidance. This ensures transparency and comparability, helping investors, consumers, and regulators evaluate corporate progress.

Implementation: Steps and Best Practices

Automakers, suppliers, and business partners interested in aligning with net-zero goals should consider the following steps:

Assess your current emissions footprint : Use established protocols to measure direct, indirect, and value chain emissions.
Set science-based targets : Engage with organizations like SBTi to set credible, transparent goals.
Develop a decarbonization roadmap : Prioritize electrification, renewable energy, sustainable materials, and supply chain engagement.
Engage suppliers early : Work collaboratively to improve emissions data quality and set mutual reduction targets.
Invest in circularity and innovation : Explore new business models, material recovery, and reuse strategies.
Report and disclose progress : Adhere to global reporting standards and publish regular updates on progress and challenges.

Challenges and Solutions

Despite progress, the sector faces significant challenges:

Gaps in emissions reporting and target ambition : Many automakers lack detailed, credible decarbonization plans or lag behind on electrification targets [4] .
High emissions from EV production : Battery manufacturing remains energy-intensive; solutions include localizing supply chains and increasing renewable energy use.
Regulatory uncertainty and evolving standards : Automakers must remain agile and engage with industry initiatives to ensure compliance and best practices.

To address these challenges, businesses should:

Participate in consultations with standard-setting bodies like SBTi
Adopt continuous improvement and innovation cycles
Collaborate across the value chain for broader impact

Accessing Resources and Getting Involved

If you are a supplier, business partner, or stakeholder seeking to participate in or benefit from automakers’ net-zero strategies, you can:

Review sustainability disclosures and net-zero roadmaps on official manufacturer websites (e.g., Toyota, Stellantis)
Engage with industry groups and participate in public consultations, such as those hosted by the Science Based Targets initiative (search for “SBTi automotive consultation”)
Contact company sustainability teams or supplier engagement programs, often listed on official corporate sustainability pages
Stay informed about evolving regulations and reporting standards by monitoring updates from reputable environmental organizations and government agencies

You can also search for dedicated supplier portals or industry events focused on automotive sustainability for further involvement opportunities.

Key Takeaways

While automotive manufacturers have made public commitments to achieving net-zero emissions, progress varies widely. Companies leading the charge combine ambitious electrification targets with concrete actions on supply chain decarbonization and circularity. Ongoing challenges-such as emissions reporting, supply chain complexity, and high battery production emissions-require further innovation, collaboration, and regulatory engagement. Businesses and stakeholders can play an active role by aligning with science-based targets, adopting best practices, and contributing to industry-wide transformation.