Miles travelled by light-duty vehicles—passenger cars and light-duty trucks—increased by almost 50 percent between 1990 and 2018. In 2018, the automotive industry accounted for 28.2 percent of all U.S. greenhouse gas emissions. Fortunately, the automotive industry has, relatively speaking, the clearest path to full electrification. In my opinion, it’s now only a matter of time until all the cars are fully electric. Electric vehicles (EVs) will continue to decrease in price, and the EV consumer will change from technofile and early adopter to regular Joe.
There is major progress being made across the world, particularly in China, Europe, and the UK. China in particular has continued to push the envelope, as they were responsible for half of worldwide EV sales in 2019.
The 2019 total annual sales of EVs surpassed the much anticipated milestone of two-million vehicles—adding to the global stock of 7.2 million. From 2018 to 2019 the global stock of electric cars increased by 40 percent. And as the automotive industry continues to change, so do the companies who hold the most power. Tesla, the number one fastest growing brand worldwide, is at the vanguard of this transition. And while Tesla certainly has had a tremendous positive influence on the industry as a whole, many of their business practices and investments are unsustainable and should be further scrutinized.
In their most recent Impact Report put out in late 2020, Tesla touted a combined savings of over 4 million metric tons of CO2. I like Tesla, what they’re doing is great, and their role in decarbonizing the transportation sector is massive. While Tesla’s carbon footprint is generally very well rated, they are far from perfect. As you may have read in the news, Tesla recently invested $1.5 billion in Bitcoin stock, and announced that it would begin accepting payments for its products in cryptocurrency in the near term. In an annual report, Tesla disclosed that the purchase would help “diversify and maximize returns on our cash that is not required to maintain adequate operating utility.” Since they announced this purchase, Bitcoin’s value has boosted to a historic high of $57,000. Shockingly, Tesla is projected to profit more from their investment in Bitcoin than from all vehicle sales in 2020—$721 million from operations in 2020, whereas several research analysts are predicting a total capital gain of over $1 billion from their investment in Bitcoin.
Okay, cool—Tesla is now an investment fund of sorts, and CEO Elon Musk would be the one to do it. But are there any further reaching impacts of the rise of Bitcoin? It turns out that the answer is a strong yes. As it currently stands, Bitcoin’s carbon footprint is equivalent to that of New Zealand—producing 36.95 megatons of CO2 annually, according to Digiconomist’s Bitcoin Energy Consumption index. The Cambridge Bitcoin Electricity Consumption Index shows the total annual energy consumption of Bitcoin as 110.53 TWh, more than all energy consumed by the Netherlands. I do not think that Bitcoin and its large need for energy is inherently bad. I don’t think curbing consumption is a viable way to solve the climate crisis. Humanity will continue to grow in size and consume more. People will continue to fly and drive cars––you get the point. The essential part is that we transition to employing more efficient, cleaner energy sources. And unfortunately in the case of Tesla, the majority of Bitcoin miners are based in China, where the majority of power comes from coal. Tesla’s investment in Bitcoin is unsustainable, premature and lacks environmental awareness—something they so strongly pride themselves on. If the car industry is to become fully carbon neutral, things like this can’t slip through the cracks. As Bitcoin and other cryptocurrencies slowly make their way into the mainstream, it is crucial that they are supported and fueled by renewable energies.
All this is to say that it will be progressively important to track the negative externalities and unforeseen consequences of the actions made by the companies that lead our country and our world. Any well known company will have on their website a well manicured sustainability report. But if you do just a little bit of digging and see what’s behind it, you’ll find that there is, albeit to varying extents, lack of substance and comprehensiveness in their plans.
It can be a bit of work to do this, I know. But perhaps you draw the line somewhere, and only buy from companies who fit your standard of sustainability. And sometimes it can be hard to know when to draw the line- how badly do I want this, and how much do I care about these negative aspects? In any case, trends in consumer sentiment can have very powerful and lasting effects, and companies will make changes because of them. The more informed the consumer the better.