Carmakers face ‘big oil’ risk as emissions gap raises fresh questions

Major carmakers are facing fresh pressure over how they report vehicle emissions, as new analysis warns that slow electric vehicle plans could create financial and reputational risks.

A report by climate finance think tank Carbon Tracker says several major automakers may be presenting a cleaner picture than real-world vehicle use suggests. The warning matters for drivers, investors and policymakers because the industry is central to future oil demand.

Carbon Tracker examined 17 of the world’s largest original equipment manufacturers, known as OEMs. Together, they account for about 80% of global passenger vehicle sales.

The think tank found a 33% median gap between the emissions reported by carmakers and its estimate of real-world emissions from vehicle use. It calls this difference the “Carbon Gap”.

The report says the gap is caused by three main issues. Some carmakers use low lifetime mileage assumptions, optimistic plug-in hybrid usage estimates and reporting boundaries that exclude upstream fuel-production emissions.

This matters because most pollution from cars does not come from factory production. It comes from the fuel burned over years of driving.

Carbon Tracker argues that this makes some legacy automakers look similar to oil and gas companies. The reason is simple: every petrol, diesel or hybrid car sold today can lock drivers into fuel use for many years.

The report says each internal combustion or hybrid vehicle sold can create 10 to 20 years of future oil consumption. That gives automakers a direct role in shaping demand for petrol and diesel.

The issue comes at a sensitive time for the global car industry. Electric car sales passed 20 million in 2025, according to the International Energy Agency.

That means one in four new cars sold globally was electric. The IEA expects electric car sales to reach about 23 million in 2026, equal to 28% of total car sales.

This creates a difficult moment for traditional manufacturers. They must protect current profits from petrol, diesel and hybrid vehicles while investing heavily in battery-electric models.

Carbon Tracker says companies that move too slowly could face stranded-asset risk. That means factories, platforms, engines and supply chains may lose value as regulation and consumer demand move toward cleaner vehicles.

The concern is not only about climate targets. It is also about business survival.

If investors rely on incomplete emissions figures, they may underestimate the risks facing some carmakers. If consumers believe a brand is greener than it really is, they may make buying decisions based on weak information.

Workers could also be affected. A slow or unclear transition can place jobs at risk if companies fail to prepare for new technologies, battery supply chains and changing market rules.

The report highlights the growing importance of battery-electric vehicle sales share. Carbon Tracker says investors should treat BEV sales as a core measure of transition progress.

It also wants regulators to improve how automakers report Scope 3 vehicle-use emissions. These are the emissions linked to products sold by a company after they leave the factory.

The message is clear. In the new automotive economy, clean branding is no longer enough.

Carmakers will be judged not only by what they promise, but by what they sell, how they report it and how quickly they move away from long-term oil dependence.

For the industry, the risk is bigger than public criticism. It is the possibility that some carmakers may become the next climate-risk story after Big Oil.

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