Changing Drivers: A WRI/SAM Report
* Emerging carbon constraints constitute a new and additional influence on competitiveness in the automotive industry.
Translation: Performance on CO2 emissions will become a key competitive driver.
* “Carbon intensity of profits” and management quality around lower-carbon technologies are two key determinants of an OEM’s sensitivity to carbon constraints.
Translation: The laggards in the industry will face uphill battle of tackling costs of emissions reductions and maintaining profitability.
* Carbon constraints could significantly affect OEMs’ earnings and should be viewed as a material issue by investors.
Translation: The further behind the OEMs fall in the race to cut their carbon emissions, the harder will be the impact on their bottomline. Investors should take note of who these laggards are.
* Relative sensitivity to carbon constraints also serves as an indicator of OEMs’ positioning with regard to other market dynamics.
Translation: This assessment should not be taken as valid only for the developed world, but also for the emerging markets such as China, where fuel economy and CO2 emissions will become critical issues as well.