An electrical wave has jolted the auto industry into action this year—or at least into making big promises.
Volkswagen says electric vehicles will account for half of its sales by 2030. General Motors plans to sell only electric vehicles by 2035. Daimler—the parent company of Mercedes-Benz—aims to reach the same benchmark five years earlier.
With falling battery and technology costs giving rise to a rash of such pledges, the William and Flora Hewlett Foundation sees a critical climate tipping point—and a vital role for philanthropy in ensuring the promised electric transition reaches the world’s roads as soon as possible.
In June, the $13.3 billion grantmaker released a new five-year plan that will not only put every cent of its $21 million transportation program budget toward electrifying road transport, but also aims to marshal 10 times that amount from philanthropy at large in support of its goal.
The document, titled the Zero Emission Transportation Strategy, foresees a vast array of forces working against the transition, from lack of vehicle supply and too-high prices to insufficient charging infrastructure and auto supply chain capacity. And then there’s always interest in preserving the status quo among manufacturers and the fossil fuel industry.
Why step in now? The foundation does not believe the market alone will swiftly overcome these obstacles. And while it acknowledges that other transportation issues remain critical, it hopes a concentrated effort by philanthropy can tip the balance on electric vehicles.
“It seemed like the right space we could enter and really make a difference,” said Anand Gopal, who manages the foundation’s transportation program. “On its own, it won’t happen fast enough to meet the climate challenge.”
Hewlett’s plan is likely to influence the future of transportation philanthropy, but also reflects a broader consensus among major climate funders. The Menlo Park-based grantmaker’s climate grantmaking is, by most measures, second only to the recently minted Bezos Earth Fund. Hewlett has been a leader in the space since 2008, when it made a $1 billion-plus pledge along with other funders that gave rise to the first major wave of climate philanthropy. That commitment included launching ClimateWorks Foundation, which this March kicked off a Drive Electric Campaign that also aims to channel philanthropic investment toward electrifying road transportation.
However, Hewlett’s narrow focus on road vehicles concerns some other funders in the transportation space. “We can’t drive our way out of this problem,” said Darryl Young, director of the sustainable cities program at Summit Foundation and a member of the Mobility and Access Collaborative, a group of transportation funders. “We don’t need a single solution, we need a panoply of solutions, and given the leadership role of Hewlett, they need to support others.”
I took a look at how Hewlett chose this path, how it aims to achieve its goals, the impacts success could have, and why some other funders want the foundation to broaden its vision.
How the plan came about
Hewlett has been funding transportation projects since 2008, when it joined with two other grantmakers to launch ClimateWorks. Transportation is one of six areas in Hewlett’s overall climate initiative, and until recently, that grant portfolio took a broad approach.
“Until two or three years ago, we had to do a large variety of things,” Gopal said. The foundation looked at measures like making engines more fuel efficient, getting more people to take public transportation and reducing emissions from aviation and shipping. “A lot of these things didn’t yield fruit,” he told me. “None of those were actually going to get us to zero.”
Rapid improvement in battery technology convinced the foundation there was another way. “We actually saw a pathway to getting to zero emissions,” Gopal said. So the foundation decided to put all its transportation chips on the electrification of vehicles, at least temporarily, and encourage others to join its efforts in what it sees as a crucial moment.
Why Hewlett think it is necessary
Transportation is the largest category of emissions in the United States and among the top three in Europe. Unlike the power sector, transportation emissions continue to rise in most of those regions. Road transportation accounts for about 80% of transportation emissions, according to Hewlett’s analysis.
The foundation’s strategy focuses on four of the heaviest regions for emissions: China, Europe, India and the United States. Together, those regions account for about 70% of global demand for new vehicles and 70% of global vehicle production. “When you’re in a hole, you need to stop digging,” Gopal said.
The foundation calculates that achieving its goal—reducing emissions by 95% or more in the four targeted regions—would prevent up to 550,000 deaths from air pollution and create as many as 35 million new jobs by 2050. It even estimates saving as much as $6.7 trillion from climate damage avoided.
At the moment, automakers seem to be tripping over themselves to make this transition without any help from philanthropy. But there are plenty of reasons to doubt the industry’s resolve.
Volkswagen is just a few years removed from being forced to pay about $20 billion in fines and settlements for cheating on U.S. diesel engine emissions tests. It and other German automakers were recently fined hundreds of millions of dollars for colluding to limit the effectiveness of the emissions technology used in the cars they sold in the EU. Toyota, famous for its path-breaking Prius hybrid, is apparently opposing a transition to electric—and not long ago, paid the largest civil penalty ever for emissions violations. Not to mention, most automakers were only recently pushing against stricter U.S. emissions requirements during the Trump administration.
“The incumbent automakers are doing everything they can to slow that transition down. And if we slow it down, we just kind of run out of our carbon budget,” Gopal said.
What Hewlett will do
Hewlett’s strategy has three primary goals, and all are to some degree policy-focused. “In electric vehicles, the biggest leverage point for scarce philanthropic dollars is definitely policy,” Gopal said.
First, the plan aims to secure regulations at the state, national and international levels that support the transition to electric vehicles, such as strict emissions limits. Second, it will support creating a network of “ubiquitous, affordable” charging stations by doing things like encouraging public financing, backing charger incentives and expanding options at workplaces and apartment buildings. Third, it aims to increase demand for electric vehicles, whether from individual buyers or fleet commitments from governments and businesses, via efforts including subsidies and the electrification of road transit.
Hewlett sees three philanthropic levers for achieving these ends. One is to build a “more diverse and stronger” ecosystem of allies to support change. The intention is a broad-based coalition, ranging from environmental justice organizations, labor groups and health advocates to businesses, utilities and investors. Gopal says Hewlett has targets for how much of its budget goes to certain types of grantees.
Another approach will be building grantee capacity. This includes work on justice, equity, diversity and inclusion, such as funding existing grantees to look closely at their own internal cultures. One organization Hewlett is funding in this area is the Greenlining Institute, the national nonprofit support organization. Additional support for this area of work will come from Hewlett’s separate organizational effectiveness program.
In the past, Gopal said, the foundation’s climate funding has generally tackled transportation without a specifically equity-oriented approach, with such impacts being more of an “incidental co-benefit.” Now the foundation views such considerations as “really integral to how we think about winning on electrification,” he said. While the public image of electric vehicles is often a shiny new Tesla, electrification can benefit lower-income or predominantly non-white populations by, for instance, reducing pollution in neighborhoods near highways or, in the case of freight, an interrelated Hewlett priority, rail lines.
Finally, Hewlett hopes to convince others to throw money in the pot. The foundation estimates a total of $210 million is needed for its four-region approach, based on its own past investments, ClimateWorks’ database of past funding and those efforts’ success rates. “It’s more likely too low than too high,” Gopal said of the estimate. Hewlett plans to work with its grantee partners and the Climate Leadership Initiative—a nonprofit that works to bring wealthy individual donors into the climate space—to grow the pot of funding. Gopal is hopeful some new institutional players, like Sequoia Climate Fund and Climate Imperative, may also join the push.
Concerns about narrow vision
Despite the scope of Hewlett’s plan, some worry about its limited focus. Young of the Summit Foundation likens a sole focus on vehicle electrification to a power sector strategy focused solely on solar, ignoring important complementary areas like wind or geothermal power. He and others would like to see efforts to reduce vehicle miles traveled, expand public transportation and integrate solutions like bike shares, scooters and shared electric motorbikes into the transportation system.
“We need to invest in electrification and we need to invest in mobility work. We’re seeing the big investment in electrification, we’re not seeing it in mobility,” said Martha Roskowski, a consultant with the Mobility and Access Collaborative. “I wish we could balance those scales a bit more.”
America’s transportation networks—whether highways, rail lines or bus routes—have long reflected and reinforced patterns of systemic racism and historical inequities, from the routes chosen to the neighborhoods displaced or disparities in the frequency of service. Roskowski, a veteran of public transportation advocacy whose work includes Hewlett-funded projects, is concerned both that electric vehicle policies may add to that legacy and that equity concerns could “very quickly bring progress to a halt.” For instance, a congressional study found more than three-quarters of tax rebates for electric vehicles benefitted households making more than $100,000 a year. “I worry that the Hewlett strategy does not fully take that into account,” she said.
What the future may hold
Hewlett was drawn to electrification by the potential for impact and the outsized role of road vehicles in transportation emissions. But given rapid changes in the industry, changes to its strategy are expected. For instance, the geographic focus may need to shift. Success in one or more of the target regions could lead to combustion engine vehicles being sent en masse to Africa and Southeast Asia for resale. Hewlett may expand the initiative if it sees signs of that occurring, Gopal said. Similarly, ambitious new European Union climate legislation may allow Hewlett to rebalance messaging and resources.
Changes in staffing and leadership at the foundation may also impact how the strategy plays out. Gopal, who joined the foundation in 2018 and played a lead role in drafting the new strategy, will soon depart for a role at Energy Innovation.
While Hewlett has chosen to emphasize road transport for now, it still has an eye on air and marine transport, which Gopal calls “equally important.” There is, of course, no reaching net zero without decarbonizing those sectors—and the foundation may rejoin those efforts down the line. Perhaps mobility and public transport will also be part of that future mix.
“Our hope is that in an ideal scenario, if we fund road transport for four or five years, maybe six or seven, we see enough of that market tipping that we may change our funding to focus on air and marine,” Gopal said. “We are trying to focus for a few years and then zoom out.”