new delhi a new report driving disruption analysing 16 of the worlds largest publiclylisted automotive companies with a total market capitalization of 790 billion reveals that the industry must adapt rapidly to address technological disruption and environmental regulation or risk falling behind the companies analysed in the report from cdp represent more than threequarters of the global passenger vehicle market with road transport accounting for 17 per cent of global carbon dioxide emissions the auto sector is facing a complete overhaul with technological disruption already well underway the research shows that evs could become as affordable as traditional petrol and diesel cars as soon as 2022 making it easier for carmakers to profit from the low carbon transition indeed a third of new cars sales are expected to be zero emissions and plugin hybrid by 2030 representing a potential 1 trillion market at the same time over a fifth of automotive company profits are expected to shift to tech suppliers and ridesharing services such as uber and google by 2030 traditional carmakers are responding well to the shift in global consumer trends these companies have invested more than us11 billion in autonomous and shared vehicle companies such as lyft since 2015 and have set a huge number of aggressive electric and autonomous vehicle targets in the last year general motors for example is working towards an allelectric future and is aiming to rollout a fully selfdriving ridesharing service by 2019however the research finds that half of these carmakers still risk penalties by missing their emissions targets and costs could be high with up to 940 million at risk in the eu alone emissions must be reduced by up to a fifth over the next 5 years meaning that some companies will need to increase their share of sales from evs to 20 per cent in order to meet the eus 2021 targetsthe cdp report assesses companies across three key areas aligned with the recommendations from mark carneys task force on climaterelated financial disclosures tcfd as the tcfd recommendations become mainstream investors will increasingly expect auto companies to disclose how they are adjusting their business models to manage transition risks while taking advantage of the opportunity to generate revenue from the global transition to a lowcarbon economy the report also highlights other potential risks and opportunities for the sector1 china key to auto sector disruption the largest vehicle market in the world has aggressive targets for new energy vehicles such as evs this is significant as china accounts for 29 per cent of global passenger vehicle sales 2 all eyes on governance governance and remuneration structures lack alignment with the low carbon transition but european companies lead with a greater focus on climate linked remuneration and board level expertise 3 increasing compliance costs carmakers face increasing costs for complying with emissions regulations for traditional car engines which are expected to increase threefold by 2025 and reach over 2200 per vehicle companies may struggle to pass these costs onto consumers 4