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Regulatory risks escalate auto electrification costs
Tightening emissions standards demand urgent supply chain realignment and accelerated EV transition investments
Risk profile
Automotive
Publication date: 15 Apr 2025
By Eye For Business
Climate-related risks
EU mandates 55% CO₂ cuts by 2030, with €95/gram fines. GM invests USD27bn in EVs through 2025, while Tesla's ESG exclusions persist despite avoiding 18Mt CO₂ in 2024. Volkswagen reports 30% battery supply vulnerabilities in cobalt regions.
Impacts across the value chain
Scope 3 emissions form 85% of sector footprints. Ford faces USD4.2bn lithium price risks by 2030. Toyota Tsusho finds 40% higher ICE supplier costs versus EV peers. Tesla's 62 safety incidents at Nevada Gigafactory prompt investor scrutiny.
Mitigation and adaptation
BMW achieved 28% energy intensity reduction via circular battery recycling networks. Stellantis commits €50 billion to secure ethical nickel supplies, while Mahindra's 2030 plan targets 50% recycled aluminium in chassis production. 78% of Tier 1 suppliers now mandate conflict mineral audits, per SAIC disclosures.
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