Environmental sustainability is firmly at the top of automotive companies’ agendas and will remain so for decades to come. As the Financial Times named Elon Musk as its person of the year in 2021 for the way he’s transformed the industry, and as one of the largest car makers, Toyota, pledges $35 billion to help ensure all its models sold in Europe will be fully electric by 2035 the impact of sustainability is clearly evident. But how can leaders ensure that this sustainability is itself sustainable?
Every manufacturer knows the technical and financial challenges that lie ahead, not to mention meeting volatile consumer demand. To ensure that they are making the right moves and can predict with some degree of certainty the impact of the massive bets they need to place, automotive businesses need a tightly woven data fabric. Understanding the complex interactions within their own business that contribute or impede design and build of truly sustainable products is just the first step. They also need to invest in insights that will help them coach customers into more sustainable transport solutions. Simple ‘tank to wheel’, ‘battery to wheel’ or, for manufacturing ‘dividing energy used to run plants with number of vehicles produced’ environmental calculations paint an incomplete picture insufficient to support the massive, industry-shaping decisions that lie ahead. Granular, integrated data that acts as a continuous digital thread connecting every aspect of the complete value chain across the life cycle of each vehicle and its related services, is vital to bring confidence to these decisions.
Environmental KPIs to track every KG of CO2
As the Toyota announcement underlines, manufacturers have already made significant investments in design and build of sustainable vehicles. From battery technology and accelerating the journey towards replacing the internal combustion engine, to using less plastics and planning-in recoupment and re-use of materials, good work is already underway. But to ensure, and crucially be able to demonstrate, overall reductions in environmental footprint, companies must be able to track and influence the impact of every step in the complete supply chain. Just as finance teams need granular data to establish per-vehicle cost down to individual component level, so sustainability reporting will need to attribute every Kg of carbon-dioxide and every litre of water use in the design, build and transportation of every vehicle. Supply chains must also be monitored to understand their environment impact in detail. ‘Tank-to-wheel’ mindset is no longer enough. The new KPIs of the sustainable automotive business will evolve rapidly to a ‘well-to-wheel’ transparent model, encompassing the lifecycle of every individual vehicle, battery, ICE and related components and spare part.
Fortunately, many of the data, and the analytic models, needed are already being developed to improve resilience and flexibility in, for example supply chains. Calculating the CO2 cost of holding a higher level of parts in storage, rather than expediting to meet emerging needs, is not significantly different from calculating the financial cost of that decision. The same data fabric that supports the former can extend to deliver the latter; it just requires integration of another set of data from another source. Digital threads that connect all parts of the business ensure that analytics created to answer one business problem can be easily repurposed to answer a wide range of business needs.
Using Insights to Coach Customers to Sustainable Solutions
Ultimately it is the customer that stands at the head of these data threads. Not only will data on emerging customer behaviours and expectations flow along the thread right back to vehicle design, but data from every step will be necessary to coach and make customers feel comfortable with their choice of vehicle. Understanding your customer has never been so important. The sustainable automotive business of the future will not only have to provide consumers with detailed information on the overall environmental impact of each specific vehicle. but will need to create bespoke transportation products that fully meet varied requirements in innovative and exciting ways.
For example, to challenge anxiety around sparse charging infrastructure, and so help customers into their first electric vehicles, automotive businesses should leverage precise telemetry from on-board sensors to demonstrate exactly how many journeys can be done on a single charge. Combined with socio-economic and ‘life-stage’ data they could recommend entirely new mobility solutions. These could include leasing lower-cost, smaller EVs for everyday use with the option to upgrade to larger, longer-range (potentially ICE-powered) vehicles if needed. Manufacturers should leverage their insights from actual usage data to propose more integrated transport solutions and help educate customers on how to make more environmentally friendly journeys. The same applies to commercial vehicles where each transport mission can be optimized for sustainability, cost, time of delivery and so on based on analytics of integrated data from a multitude of sources. Additional ‘as-a-Service’ features such as enhanced infotainment or autonomous driving aids can designed in to meet precise specifications and contribute to the overall sustainable mobility experience.
The Catalyst for Change
Successfully navigating this ever-changing relationship between customers and automotive brands, whilst delivering profitable growth, will rest on data. Granular data from multiple sources, collected and integrated at every stage of the process from customer to design-team, and made available to fuel analytic models that drive better decisions. Creating bespoke applications and silos of data to support sustainability initiatives makes no sense. Making the right decisions on sustainability is no different from any other area of the business, and existing Teradata systems already supporting data analytics for other business purposes can be simply extended to support these models.
Sustainability is more than the latest wave of change to impact the automotive sector. It is a catalyst to transform the structure and purpose of the industry. It urges all participants to radically rethink how they continue to meet the needs of customers, the planet and their own businesses. The outcomes are still largely unknown, yet huge amounts of capital and resources are being invested in this future. Bringing together the right data, from the right sources, in ways that can be effectively used to bring clarity and confidence to these decisions is essential. Deploying data at speed and scale to support better business decisions, is what Teradata does. To find out how we can help you make sustainable sustainability decisions please email our automotive industry consultancy team.