Porsche tells suppliers go green or lose contracts

Porsche is to demand 1,300 suppliers use renewable energy to manufacture its vehicle components if they wish to continue doing business with the company.

The car company said as of July 2021, all new supplier contracts will need to meet Porsche’s clean energy requirements as it aims to achieve a carbon neutral supply chain by 2030.

Uwe-Karsten Städter, Porsche board member responsible for purchasing, said: “Our battery cell suppliers must use green electricity from 2020 onwards. 

“Now we are taking the next important step: also suppliers of components for production vehicles must produce them only with energy from renewable sources and thus ensure further reductions in CO2 emissions.” 

Porsche said it could only achieve its ambition to reach carbon neutrality by 2030 if it received “hefty cooperation” from suppliers.

Currently Porsche’s supply chain is responsible for about 20% of the company's total carbon dioxide production. But this proportion is likely to rise to 40% as it begins electrifying its vehicle lineup and makes changes to become carbon neutral.

“Suppliers who are unwilling to switch to certified green energy will no longer be considered for contracts with Porsche in the long term,” said the company, which added it planned to hold intensive discussions with suppliers around sustainability issues.  

Porsche has also pledged to invest more than €1bn in decarbonisation measures over the next 10 years. 

By 2030 the company expects more than 80% of all new vehicles to be electric vehicles or plug-in hybrids and by 2025, 50% of cars will have an electric motor.

Last July BMW announced that a supplier’s carbon footprint would be a key factor in tendering decisions under a wide-ranging sustainability initiative, SM reported.

The carmaker said it was aiming for carbon emissions from production and sites to be lowered by 80% per vehicle and said it would be impossible to achieve the CO2 emissions targets without supply chain action.

As a result the company said it would define a supplier’s carbon footprint as a decision criterion in its contract award processes.

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