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 businesses seek alternative payment channels to Russia amidst sanctions

Chinese businesses are encountering difficulties in shipping its products to Russia, not due to any issues with the goods themselves, but because major Chinese banks are restricting payments for such transactions over concerns regarding U.S. sanctions. To settle payments for products companies are…

Fossil supermajors lift output into a soft tape, betting on 2026–27

Big Oil is getting ready to pump more, just as prices sag and OPEC+ keeps the taps open. The five supermajors, namely Exxon Mobil, Chevron, Shell, BP, and TotalEnergies, are set to lift output this year and again in 2026, a choice that looks perverse against today’s oversupplied market but makes sense if you believe the squeeze comes later.

Management teams are gaming a late-2026/2027 tightening, arguing that if they don’t sanction barrels now, they’ll miss the upcycle. That view sits behind a broader portfolio pivot: trim buybacks, slow or shelve low-carbon projects with soft returns, cut headcount, and push capital back toward oil and gas developments that still throw off the fattest cash margins.

EU CBAM forces India’s steel exports to pivot away from Europe

India’s steel industry is bracing for a structural shock in its export model as the EU’s Carbon Border Adjustment Mechanism moves from theory to impact on January 1. For more than a decade, Europe has been the premium destination for Indian steel exports; roughly two-thirds of India’s outbound steel tonnage has gone into the European Economic Area, often at better margins than regional markets.

CBAM now effectively inserts a carbon price at the EU border, turning emissions intensity into a hard trade variable rather than a soft ESG talking point. The immediate consequence, as Indian mills and analysts are already acknowledging, is that exports to Europe are likely to slow and trade flows will be redirected toward Africa and the Middle East, at least in the near term.

Stay informed

error: Content is protected !!