Elon Musk stated that Tesla will no longer accept Bitcoin on May 13th due to Bitcoin’s high energy consumption. However, the company is still well ahead of Ford and General Motors in terms of reporting carbon emissions and setting targets. So, how green is Tesla, really?
People concerned about the future of the planet have long praised Tesla’s efforts “To accelerate the world’s transition towards sustainable energy.” According to the company, ” The faster the world moves away from fossil fuels and toward a zero-emission future, then the better.
Elon Musk, the founder and CEO of Bitcoin, caused concern among environmentalists in early 2021 when he endorsed it. However, he reversed his position on May 13th with a Tweet. Partly responding to a tweet by the Cambridge Centre for Alternative Finance describing Bitcoin’s energy use as “insane,” Musk stated that Tesla would no more transact in Bitcoin due to its dependence on fossil fuels and the “great cost to our environment.”
Tesla has made electric cars a reality. It is clear that this company has disrupted the automotive industry. Perhaps even more important, it has made them attractive. The Model 3 was launched in 2017, and both corporate elites as well as tree-huggers were on the waiting list. As a result, Tesla was able to create electric cars in places where American rivals General Motors and Ford had failed.
Tesla’s story of being green isn’t as simple as it seems.
Arabesque recently conducted a study that did not make public the findings that the car company was among the top 15% of global companies across 14 indices that don’t disclose their greenhouse gas emissions. General Motors and Ford are, however, far more transparent about the emissions they produce in manufacturing their vehicles as well as their targets to reduce those emissions.
It is important to ask the question: Why doesn’t Tesla disclose its carbon emissions if it truly wants a better environment?
Arabesque’s Web Research
Arabesque, an asset management company, uses ESG (environmental, social, and governance) and sustainability criteria to allocate capital. ESG policies are a sign of the company’s strategy and corporate purpose as well as its management qualities, according to Arabesque.
Arabesque expects that corporations will report two pieces of data in relation to carbon emissions.
To be considered timely, the data must also come from within the last two years.
Arabesque believes that disclosure of these targets and data allows executives to be held responsible by shareholders and climate activists. It also raises awareness among employees and encourages them to look for ways to reduce carbon.
Arabesque researchers replied that Tesla stood out from the rest when I asked them which companies did not report their carbon emissions.
Tesla lags behind GM and Ford in Disclosure and Targets
Arabesque ranked Tesla behind General Motors (GM), Ford, and General Motors (GM), which are two of Tesla’s most fierce American rivals. Both have been built on carbon-intensive combustion engines.
In 2020, Tesla customers helped accelerate the world’s transition to sustainable energy by avoiding 5.0 million metric tons of CO2e emissions.
Tesla graphs its carbon emissions, but they don’t disclose exact numbers. They also don’t give details such as Scope 1 and Scope 2 emissions or the percentage of operations covered by these graphs. In addition, the company’s 2019 report contains figures from 2017 that are not current.
It also failed to meet its carbon targets. This makes it easy for the company to trade cars in exchange for more energy-intensive bitcoin.
On the other hand, Ford and GM are open to sharing their dirty laundry. Both companies not only disclose their carbon emissions, but they also have ambitious targets to reach net-zero carbon.
General Motors employs science-based goals and plans to be carbon-neutral in products, operations, and services by 2040. It will be offering only electric vehicles by 2035. The company will invest $27 billion more in autonomous and electric-vehicle development than it does in diesel and gas vehicles to get there.
Ford uses science-based targets to become carbon-neutral by 2050. It also has very clear targets for its Score 3 emissions (the emission related to its products, such as its cars). It also plans to invest in electrification, $22 billion up to 2025.
Tesla avoids public scrutiny by remaining silent about its carbon emissions.
The Bay Area Quality Management District fined the company $139,500 in 2018 for malfunctioning burners at Fremont’s plant, which had emitted high levels of nitrogen oxide between 2013-2016. The Environmental Protection Agency is also currently investigating Tesla for not “providing records that demonstrate compliance with certain requirements under National Emission Standards for Hazardous Air pollutants under Clean Air Act of 1963 as amended” (Surface Coating of Automobiles and Light-Duty Trucks Regulations).
Carbon Commitments Versus Lower-Carbon Business Models
Although Tesla doesn’t disclose details of its carbon emissions, it has disrupted the auto industry’s dependence on combustion engines. The company does not want to move just one part of the transportation sector but the entire transport and energy ecosystem.
Tesla offers both homeowners and businesses the opportunity to produce solar energy using solar panels and then store it in a power wall battery. Tesla claims it is working to increase its battery life and recycle responsibly. But, remarkably, it has also opened up its patents–a bold move in an industry that works hard to protect its intellectual capital in order to capitalize on research-and-development investments.
Despite all these positive–even revolutionary–moves, Tesla’s lack of transparency regarding its carbon emissions and targets should raise questions about its commitment to a sustainable future. Of course, we all love the story of the eccentric who disrupts our way of doing things. But we must take a deep breath before declaring that Tesla is truly green. Tesla should at least be open to reporting its low carbon emissions if it is serious about its commitment to them. It might not have used Bitcoin if it had.