T-ASK

Mercedes-Benz announced Ambition 2039

In December 2020, Mercedes-Benz announced Ambition 2039 in the following way.

• As part of the Ambition 2039, Mercedes-Benz is pushing ahead with the transformation to CO2 neutrality with a package of measures along the entire value chain. The supplier network is a key element for achieving the climate goals of Mercedes-Benz due to the higher energy demand in the production of fully electric vehicles.
• “The electric EQS luxury sedan is already in the starting blocks for next year. We have already achieved important milestones in close cooperation with our partners . For example, by purchasing CO2 neutrally produced battery cells. We are consequently pursuing this path. When we award contracts for our subsequent electric vehicle platform, we are already applying CO2 as a key criterion for the first time consistently.”
• “Almost half of our approximately 2000 suppliers have signed an ‘Ambition Letter of Intent’. They are committed to supplying us with only CO2 neutral parts in the future. These companies account for more than half of the annual purchasing value of Mercedes-Benz AG.”

Who is Daimler AG?

Based on its homepage, we can see the company profile of Daimler AG as follows.

Daimler AG is one of the world’s most successful automotive companies. Its brands are Mercedes-Benz Cars & Vans, Daimler Trucks & Buses and Daimler Mobility divisions. The Group is one of the leading global suppliers of premium cars and one of the world’s largest manufacturer of commercial vehicles. Daimler Mobility offers financing, leasing, fleet management, investments, credit card and insurance brokerage as well as innovative mobility services.

The company founders, Gottlieb Daimler and Carl Benz, made history by inventing the automobile in 1886. As a pioneer of automotive engineering, Daimler sees shaping the future of mobility in a safe and sustainable way as both a motivation and obligation. The company’s focus therefore remains on innovative and green technologies as well as on safe and superior vehicles that both captivate and inspire.

Daimler sells its vehicles and services in nearly every country of the world and has production facilities in Europe, North and South America, Asia and Africa. In addition to Mercedes-Benz, the world’s most valuable premium automotive brand (source: Interbrand study, 17 Oct. 2019). In 2019, the Group had a workforce of around 298,700 and sold 3.34 million vehicles. Group revenues amounted to €172.7 billion and Group EBIT to €4.3 billion.

What is Life-cycle assessment?

According to Wikipedia (English), we can see the definition of Life-cycle assessment (LCA) in the following way.

Life-cycle assessment or life cycle assessment (LCA) is a methodology for assessing environmental impacts associated with all the stages of the life-cycle of a commercial product, process, or service. For instance, in the case of a manufactured product, environmental impacts are assessed from raw material extraction and processing (cradle), through the product’s manufacture, distribution and use, to the recycling or final disposal of the materials composing it (grave).

Life-cycle assessment can be prerequisite for the automotive industry

In 2020, automotive manufacturers and take further actions to tackle climate change. For example, California announced that the region will ban the new sales of gasoline engine vehicles by 2035. Another example is that the UK, one of advanced countries, will also take the similar policy. As a result, automotive companies are urged to invest in electrification. Volkswagen’s EUR 73 billion investment is the example.

However, the important question is here: Electrification is a simple solution to reduce greenhouse gas (GHGs) emissions? The answer could be “No”. This is because we need electricity in order to move electric vehicles, and because power plants emit GHGs while producing it. In addition, we need tons of energy to manufacture automobiles and their components. Therefore, some critics say that manufacturing and use of EVs produce more GHGs than gasoline engine vehicles do.

In this sense, Life-cycle assessment becomes more important and Mercedes-Benz’s the Ambition 2039 makes sense. Small medium suppliers in automotive supply chain have to keep their eye on this trend. This is because they have to follow life-cycle assessment to sustain their business in the near future.