Environmental Impact
Introduction
In this section of the Impact Report, we will go over the details and calculations of the lifetime environmental impact of our products.
Our lifecycle analysis (LCA) combines Scope 1 and 2, and material Scope 3 emissions* for a Fremont-made Model 3
While we are implementing processes to be able to measure and report Scope 1, 2 and 3 emissions on an enterprise level starting with our 2021 report, for the purpose of this report, we have conducted an LCA which includes the vast majority of Scope 1, 2 and 3 emissions, including the vehicle manufacturing phase, emissions from our supply chain, vehicle use and end-of- life for a Fremont-made Model 3. While not a perfect measure, given the importance of the Model 3 and its high volume of deliveries since 2018, it is a good proxy for understanding the emissions impact of our vehicle business. The details and boundaries of this LCA analysis are described on page 90. Our goal is to eventually produce an LCA for each of our products in addition to reporting our Scope 1, 2 and 3 emissions.
EVs undeniably generate less lifetime greenhouse gas emissions than ICE vehicles
We are often asked if electric vehicles (EVs) are more sustainable than internal combustion engine (ICE) vehicles. The environmental impact of zero-emission transport and energy products, like the products that Tesla produces and sells, is undeniably more positive than the GHG-emitting alternatives. This becomes more pronounced when determining the lifetime impact of EVs versus ICE vehicles, which requires looking at the entire lifecycle—from raw materials to use phase emissions to disposal—and not just at vehicle usage emissions.
Variables often overlooked by other lifecycle studies:
• Using Worldwide Harmonized Light Vehicle Test Procedure (WLTP) or Environmental Protection Agency (EPA) fuel/energy consumption data (both of which overestimate fuel-economy and underestimate emissions) rather than real-world data;
• Not considering the higher energy efficiency of Tesla's powertrains;
• Assuming the average EV needs a battery replacement at some point in its life;
• Not considering emissions generated through the oil refining and the transportation process; and
• Using outdated data for the carbon impact of cell manufacturing.
We try to address these considerations and complexities in deriving a more accurate calculation in the following lifecycle analysis.
Lifecycle Analysis of Tesla EVs vs. Equivalent ICE Vehicles
Using only real-world data, not official NEDC, WLPT or EPA* consumption data
The most important variable in a lifecycle analysis of an automobile is real-world fuel consumption or electricity consumption, as applicable, which impacts the use phase of the lifecycle. Various efficiency testing cycles such as NEDC, WLTP or EPA do not truly represent real-world fuel or energy consumption. Therefore, for the purpose of this analysis, we used average energy consumption over the more than 10 billion miles Tesla Model 3s have travelled as of December 31, 2020, including energy losses during the charging process. For ICE vehicles, we used real-world fuel consumption data provided by Consumer Reports, which reports model year 2020 mid-size premium sedans achieve 24.8 MPG on average. This translates to ~400 grams of CO2 per mile once we account for emissions generated through the extraction, refining and shipment of oil.
The carbon impact of ICE vehicles remains the same every year of use, but for EVs, it should improve every year
Based on publicly available sales and fleet data, we estimate that an average vehicle in the U.S. is driven slightly less than 12,000 miles per year for about 17 years before it is scrapped. Furthermore, as an ICE vehicle ages, its fuel efficiency only remains stable if serviced properly. On the other hand, electricity generation to charge EVs has become "greener" over time with the addition of cleaner energy sources to the grid. Thus, emissions generated through EV charging should continue to decline over time.
On the following pages, we will show the per mile lifecycle emissions of a current Fremont-made Model 3
This includes emissions from upstream supply chain, direct emissions from manufacturing and electricity consumption, and use phase emissions when charged from a grid with a generation mix that reflects the geographic distribution of Model 3 deliveries in each of the U.S., Europe and China. Below are the lifecycle emissions scenarios we show, and the assumptions used in each of the charts on the following pages:
• What emissions per mile could be if a Model 3 were used for ridesharing over one million miles using cell chemistry from Tesla energy products.
• What emissions per mile could be if a Model 3 were principally charged at home using a solar system and energy storage.
• What emissions per mile could be if a Model 3 were used for ridesharing over one million miles using cell chemistry from our energy products and if it were only charged using a solar system and energy storage.
• The reference ICE vehicle is based on the average mid-size premium sedan in the U.S.
• Charging a Model 3 using solar panels and a Powerwall adds emissions to the manufacturing phase while reducing use phase emissions to as low as zero when 100% of charging is done using that system.
• We assume no additional renewable energy capacity on the grid during the life of the vehicle given the shape of the
renewable energy adoption curve is still very much up for debate.
EV vs. ICE Vehicle Emissions per Mile
United States
The electricity grid keeps getting cleaner, while emissions from ICE vehicles do not
While the makeup of the electricity grid varies from region to region, charging EVs is becoming less carbon intensive every year. In the U.S., coal has historically been the dominant energy source for generating electricity. However, in the last decade, coal power has declined significantly as regions turn to cleaner energy sources, such as wind and solar. Energy generated
by renewable sources has grown rapidly—in 2021, wind, solar and battery storage are expected to account for an estimated 81% of new electricity generation capacity in the U.S. Many U.S. states (such as New York, referenced in the chart below) have been making significant investments in renewable energy, as these sustainable options become more cost competitive compared to fossil fuel resources.
To put this in perspective, average GHG emissions from charging one New York-based Tesla vehicle equates to the emissions from an ICE vehicle with a fuel economy of 135 MPG (no such vehicle is on the market). Even when charging a Tesla in Michigan, where approximately 60% of energy comes from natural gas and coal, the emissions from our vehicles still equates to the emissions from an ICE vehicle with 59 real-world MPG (considerably more in terms of EPA rated MPG). As more regions adopt sustainable energy solutions to generate power, emissions related to charging an EV from the grid will decrease even further.
EV customers can increase their renewable energy mix by installing solar panels or a Solar Roof and an energy storage solution, such as Powerwall, in their homes. This dramatically reduces the lifetime carbon footprint of an EV, even when accounting for the carbon footprint of both the solar panel/Solar Roof and Powerwall manufacturing and upstream supply chain.
EV vs. ICE Vehicle Emissions per Mile
European Union, U.K. & EFTA
A cleaner grid in Europe means a bigger emissions gap between Model 3 and a comparable ICE vehicle
In Europe, the U.K. and EFTA (Iceland, Liechtenstein, Norway and Switzerland), larger portions of energy generation come from either renewable sources or nuclear, which means that in Europe the use phase emissions gap between ICEs and EVs is even wider than it is in the U.S.
On the other hand, since an average European driver covers fewer miles per year than a U.S. driver, emissions from the manufacturing phase are divided by fewer miles. While in the U.S., an average vehicle covers 200,000 miles before getting scrapped, in Europe, total mileage is closer to 150,000 miles.
We used Austria as an example of how use phase emissions should evolve once the European grid becomes greener. As seen in the chart on the right, in Austria, all-in lifecycle emissions of a personal, grid-charged Model 3 are more than 4x lower than all-in lifecycle emissions of an equivalent ICE vehicle.
EV vs. ICE Vehicle Emissions per Mile
China
Despite a higher-emissions grid in China, Model 3 still has lower emissions than comparable ICE vehicles
In China, much of the grid is powered by coal. That said, even in this scenario, charging a Tesla Model 3 from the grid is still less emission intensive than running an ICE vehicle. Just like in Europe, we have assumed a vehicle lifetime of 150,000 miles.
We are expecting the grid mix in China to improve dramatically over time as China remains a dominant deployer and manufacturer of renewable energy. Sichuan Province (with a population of 81 million) is a great example of this. In this province, given the high percentage of renewable energy penetration, charging an EV from the grid is less polluting than charging an EV in most global countries or states.
In conclusion, even as of 2020, charging a Tesla Model 3 in any of our major markets is more environmentally friendly than burning gasoline. Considering that vehicles are used for 17 to 20 years before getting scrapped, it is reasonable to assume that in the coming years, the gap in emissions per mile between EVs and ICEs will only get wider.
Reducing Carbon Footprint Even Further
Improving Powertrain Efficiency
Efficiency of a Prius, performance of a Porsche
Tesla vehicles are known to have the highest energy efficiency of any EV built to date. In the early days of Model S production, we were able to achieve energy efficiency of 3.1 EPA miles / kWh. Today, our most efficient Model 3 Standard Range Plus (SR+) achieves an EPA range of 5.1 miles / kWh, higher than any EV in production to date. Model Y all-wheel drive (AWD) achieves 4.2 EPA miles / kWh, which makes it the most efficient electric SUV produced to date. The gap between Tesla AWD vehicle efficiency continues to stand out compared to competitors in the same segment. While achieving the best-in-class energy efficiency, our AWD models can accelerate to 60 mph in just 3.7 seconds (4.2s for Model Y) and reach a top speed of 145 mph (135 mph for Model Y). In isolation, high energy efficiency is already difficult to achieve, but getting both performance and efficiency is the tricky part.
Tesla Robotaxis will be even more energy efficient
The energy efficiency of Tesla vehicles will continue to improve over time as we continue to improve our technology and powertrain efficiency. It is also reasonable to assume that our high-mileage products, such as our future Tesla Robotaxis, will be designed for maximum energy efficiency as handling, acceleration and top speed become less relevant. This will minimize cost for our customers as well as reduce the carbon footprint per mile driven.
Reducing Carbon Footprint Even Further
Tesla Manufacturing Footprint: Current Actions
While emissions from the manufacturing phase can account for a relatively minor portion of lifetime vehicle emissions when compared to the use phase, it is still an important part of lifecycle emissions. These are the steps that we are taking to reduce the manufacturing GHG footprint:
1. Building new, better designed, more efficient vehicle factories
Building a factory from the ground up with sustainability in mind can have a material impact on reducing energy use. For each component that requires less movement around the factory, and as we use fewer robots in the vehicle production process, energy consumption declines.
Our Fremont Factory, where we started operation in 2010, was built over 60 years ago by established automotive original equipment manufacturers (OEM). While substantial improvements have been implemented since, it was not possible to fundamentally change the layout of this facility. In contrast, Tesla's newer factories are built by us from the ground up and designed to be sustainable and efficient. For example, a delivery truck can back up and offload components at the exact part of the production line where such components are needed—reducing emissions associated with the production process.