Jim Farley, Ford Motor Co's president and CEO, talks with UAW Workers Deano Felix and Cheryl Williams at the company's Michigan Assembly Plant Modification Center in Wayne, Michigan, following an event to commemorate the next step in the company’s sustainability plan. (Image courtesy Ford)
Ford Motor Company and DTE Energy are working together to bring an additional 650 megawatts of solar energy to Michigan by 2025 — at which point the automaker says it will no longer need to use electricity produced from carbon-emitting sources to assemble vehicles in the state. In doing so, Ford has cemented its dedication to transitioning to cleaner energy not just to power its products, but to manufacture them as well. While this may be considered a bold move for a legacy carmaker, it’s actually a smart financial choice in line with younger buyers’ brand expectations.
The clean energy agreement will increase the state of Michigan’s total solar energy output by 70 percent and prevent 600,000 tons of carbon dioxide emissions each year. As a comparison, the average passenger car emits 4.6 metric tons of C02 annually, so that’s the equivalent of just over 130,000 ICE vehicles coming off the road. This is the largest solar purchase in the history of the U.S. and will lead to 250 temporary jobs and 10 permanent ones.
The transition to clean energy in Michigan will beat Ford’s original goal by ten years, which bodes well for the automaker’s plan to be entirely carbon neutral by 2050. To get there, Ford plans to pour $5 billion into electric vehicles this year alone, with $50 billion total set to be expended by 2026.
Doing so may be a matter of doing the right thing for the planet, but it’s also a matter of the brand’s survival. Younger buyers — and specifically Gen Z — expect businesses to put their money where their mouth is. So, it behooves legacy automakers to not just go after Tesla’s 70 percent market share, but to be more environmentally responsible than the all-electric manufacturer in the process.
As their addiction to fast fashion has shown, Gen Z doesn’t expect perfection and there are plenty of situations where they will let sins against the climate slide. Still, the auto industry shouldn’t expect the same free pass as apparel brands like Shein and H&M. People have to wear clothes after all. But younger people are increasingly questioning whether that same imperative still applies to owning automobiles. In fact, 31 percent of Gen Z and millennial survey respondents said they didn’t think kids growing up today would ever need to drive a car.
The industry is changing — and not just in the internal combustion versus charging station sense. With potentially fewer consumers interested in passenger vehicles as status symbols, and many seeing them as unnecessary property, automakers should consider preparing for the de-growth of their primary product.
While it may sound dire, de-growth is an opportunity to put purpose ahead of profit. It’s also an opportunity for manufacturers to evolve beyond single-owner automobiles, with which Ford has been flirting— the brand best-known for its oversized, gas-guzzling trucks partnered with Motivate back in 2017 to launch bike sharing in the San Francisco Bay Area. It also built a micro-mobility subsidiary dedicated to e-scooters but sold it off earlier this year to a European competitor, Tier.
By focusing on access instead of ownership, legacy carmakers may have a better shot at remaining relevant. And while micro-mobility and carsharing remain risky investments, it may be riskier still for brands not to take a chance on innovation.
Of course, just because younger consumers appear to be shifting away from individual ownership and towards public transportation, biking, rideshare and carshare doesn’t mean that the demand for new cars will completely dry up. Indeed, new passenger vehicles will still be necessary for ridesharing and carsharing purposes as well as for a shrinking demographic of personal users. In that sense, Ford is ahead of the game as it transitions to carbon-free electricity in Michigan.
Image credit: Ford Motor Co. media relations
Riya Anne Polcastro is an author, photographer and adventurer based out of the Pacific Northwest. She enjoys writing just about anything, from gritty fiction to business and environmental issues. She is especially interested in how sustainability can be harnessed to encourage economic and environmental equity between the Global South and North. One day she hopes to travel the world with nothing but a backpack and her trusty laptop.