Geopolitical risks, supply chain issues take place of sustainability as auto industry priorities

Automakers and suppliers are shifting their sourcing priorities as they deprioritize sustainability initiatives and focus on reducing exposure to geopolitical risks. A survey, which included responses from over 1,000 executives in the automotive industry, revealed a decline of 9-11 percentage points in the number of companies implementing sustainability initiatives such as carbon footprint mapping, route optimization for emissions reduction, and providing detailed production information on origins and manufacturing between 2022 and 2023.

The average investment in sustainability initiatives has also decreased, falling from $36.6 million in 2022 to $30.5 million in 2023. Notably, around one-third of the surveyed companies admitted to lacking a comprehensive sustainability strategy.

The survey results also highlighted a shift in supply chain decision-making priorities. The primary factors influencing these decisions included quality, geopolitical risk, cost, and resilience, with sustainability considerations lagging behind. Companies are emphasizing the need to ensure operational continuity in the face of ongoing supply chain challenges, such as the COVID-19 pandemic, geopolitical tensions, semiconductor shortages, and rising costs.

Furthermore, the survey revealed that roughly 50% of semiconductor supply remains insecure, with full-stack computing platforms and microcontrollers being the most challenging to obtain. Consequently, companies are reducing their reliance on offshore supply sources. The survey noted that the proportion of supply obtained from offshore locations has decreased by over a fifth in the past two years, and another one-fifth reduction in the next two years is anticipated.

The survey suggests that sustainability initiatives are being deprioritized in favor of risk mitigation and enhancing supply chain resilience as companies adapt to the challenges posed by the ongoing supply chain disruptions and geopolitical uncertainties.

Elevate your business with QU4TRO PRO!

Gain access to comprehensive analysis, in-depth reports and market trends.

Interested in learning more?

Sign up for Top Insights Today

Top Insights Today delivers the latest insights straight to your inbox.

You will get daily industry insights on

Oil & Gas, Rare Earths & Commodities, Mining & Metals, EVs & Battery Technology, ESG & Renewable Energy, AI & Semiconductors, Aerospace & Defense, Sanctions & Regulation, Business & Politics.

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Chinese property developer Country Garden at risk of default

Chinese property developer Country Garden is facing another deadline, with two coupons totaling $66.8 million due on Monday. These coupons are tied to Country Garden’s bonds maturing in April 2024 and April 2026. While the payments have a 30-day grace period, the company faces a…

Japan and South Korea pivot to U.S. LNG under pressure from Trump

Asian energy trade dynamics are being reshaped as Japan and South Korea, under political pressure from U.S. President Donald Trump’s administration, appear to be significantly stepping up imports of American liquefied natural gas (LNG).

Asia’s LNG purchases are set to hit an eight-month high of 2.01 million metric tons in August, but far more striking is the October projection: U.S. LNG shipments to Asia could reach 3.61 million tons, the second-largest monthly volume ever, trailing only February 2021.

Trump administration prepares $5 billion critical minerals fund

The United States is quietly advancing plans to create a $5 billion mining investment vehicle in what would be its most ambitious effort yet to secure critical mineral supplies and counter China’s dominance of the sector. The U.S. International Development Finance Corporation (DFC) is negotiating a joint venture with New York–based Orion Resource Partners to back large-scale mining projects worldwide.

The proposal remains under discussion and could still collapse, but if finalized it would mark a sharp escalation in Washington’s willingness to take direct equity risk to safeguard mineral access, a major departure from its traditional hands-off approach to industrial raw materials.

Stay informed

error: Content is protected !!