Sustainability and Climate Risk (SCR) — Question 46
The CRO of an automobile manufacturer in North America prepares a keynote address on risks in the auto sector over the next decade. The CRO highlights the primary technology risks facing its line of internal combustion engine (ICE) vehicles.
At approximately what point will many manufacturers of ICE vehicles experience a significant technology risk?
Answer options
- A. Renewable energy costs fall to USD 0.10 per megawatt hour
- B. The cost of battery packs falls below USD 0.50 per kilowatt hour
- C. Renewable energy costs fall to USD 35.00 per megawatt hour
- D. The cost of battery packs falls below USD 100.00 per kilowatt hour
Correct answer: D
Explanation
The correct answer is D because as the cost of battery packs decreases below USD 100.00 per kilowatt hour, it makes electric vehicles more economically viable compared to ICE vehicles, increasing competition and risk for manufacturers of ICE vehicles. Options A and C relate to renewable energy costs, which do not directly impact ICE vehicle technology risks. Option B, while related to battery costs, suggests a threshold that is too low to significantly affect ICE vehicle manufacturers.