The production of an electric vehicle currently generates significantly more CO₂ than that of cars with a combustion engine—around 150% on average. From a lifecycle view, this additional carbon burden is offset compared to the combustion engine vehicle during the use phase, as EVs rack up zero-emission miles that eventually pull the EV ahead of the ICE.

However, the Volkswagen brand is setting up production of its coming electric ID. to be completely carbon-neutral, thereby not only levelling, but eliminating that production-phase CO₂ burden.

The compact electric car, which will go into production at the end of the year, will be the Group’s first model to be produced in a balance sheet that is CO₂-neutral. This will be made possible, among other things, by the consistent avoidance and reduction of CO₂ emissions in the supply chain.

A savings potential of about 33% was identified for the first step alone by the end of 2019. Currently unavoidable CO₂ emissions are offset by investments in certified climate protection projects elsewhere.

Volkswagen is achieving major CO₂ improvements in the production of battery cells, one of the hotspots in the supply chain. Battery cell production is very energy-intensive so far, due to various factors—among other things, a lot of electricity is consumed during the drying of the materials, which are applied in liquid form to a film. This is a burden on the CO₂ balance, especially in countries that have a high proportion of fossil fuels in their electricity mix.

LG Chem is supplying the cells for the ID., and is setting up a production facility in Poland for this purpose. Volkswagen already fixed an agreement with this Korean company, that only certified green power would be used to manufacture the battery cells. By doing so, CO₂ emissions will be reduced to almost zero.

Further focal points for CO₂ reductions in the supply chain are production of steel and electric motors. In the case of steel, complex processes —including end-of-pipe technologies, which are only used at the end of the process—can lead to savings of up to 70%. In the electric motor, Volkswagen uses recycled aluminum for the housing. The savings potential of these and other measures is 50%.

The challenges of carbon reduction grow as one move furthers upstream the supply chain towards raw materials. One hundred percent transparency across all stages is not yet possible, Volkswagen says. This is reinforced by a high degree of complexity;there are more than 40,000 direct suppliers worldwide, plus a multiple of indirect suppliers, some of whom are seven to eight stages away from the finished product.

At the moment, several pilot projects are underway at Volkswagen to precisely identify the material origin of goods and to initiate measures if risks are identified. In addition, award criteria have significantly been tightened for suppliers by means of a new sustainability rating: compliance and sustainability performance will thus become a selection criterion as binding as price or quality.

Apart from climate protection, compliance with social standards also plays a central role for Volkswagen when it comes to resource requirements - especially in the responsible mining of E raw materials such as lithium and cobalt. In the future, Volkswagen will check on site whether subcontractors meet the requirements. Further transparency measures include cooperation with other automotive manufacturers and participation in cross-sector initiatives such as the Global Battery Alliance and the Responsible Minerals Initiative (RMI).

In the RMI, for example, Volkswagen is working on a certification system for cobalt melts in order to improve degradation conditions and make the origin of the material traceable. Another example is the “Drive Sustainability” working group. It is developing uniform monitoring instruments and sustainability training courses for suppliers. The targeted reduction of these raw materials within the battery cells is also important. The engineers at Volkswagen research and development are currently also working on this issue.

The plant in Zwickau is already using externally produced power from renewable sources. Unavoidable emissions in the manufacturing process are offset by investments in certified climate projects. As a result, the ID. will be manufactured CO₂-neutral from the start.

For charging, Volkswagen recommends the use of energy from renewable sources such as wind power and hydro-power. The new Volkswagen subsidiary Elli has recently begun to offer regeneratively produced electricity called Volkswagen Naturstrom. (Earlier post.) The IONITY fast-charging network created by Volkswagen and other car manufacturers will offer green power at about 400 charging locations on European motorways, wherever available.