New Delhi: With their number of takers on the rise, SUVs are driving the growth of most passenger vehicle markets across the globe, including India. While they get the thumbs up from consumers for the practicality and power they offer, at least some of them are also responsible for the decline in the average fuel efficiency improvement in light-duty vehicles globally.
‘The overall increase in the average weight of vehicles sold globally stems from a decline in the sales share of city and medium-sized cars, accompanied by a massive shift toward SUVs’, says the International Energy Agency (IEA) in a recent report. It notes that the global average fuel consumption by cars and vans improved only 0.9% between 2017 and 2019, compared to a 2.6% average reduction annually between 2010 and 2015.
The drop in the improvement rate of fuel efficiency can also be attributed to the shrinking room for improvement in internal combustion engines. Advanced powertrain and material technologies can help, but in some cases the additional cost could be a hurdle.
Bane of rising vehicle weight, engine power
According to IEA, advancements in vehicle technologies improved the rated fuel consumption of all new vehicles from 2010 to 2019. However a ‘large share’ of these improvements has been offset by the increased weight and engine power.
The report notes that the share of technical improvements that have been nullified by greater vehicle size and power stands at 17% in India. It’s 40% in the leading markets of China, USA, and Europe. The percentage of nullification in India is comparatively less as small and compact SUVs have a major share in the domestic SUV market pie.
During 2010 – 2019, the share of small and large SUVs and pick-up trucks jumped from 20% to almost 45%. The growth of small SUVs, the most popular segment in 2019, was the highest. The report also notes that though the SUV popularity is cooling down a little, its share in overall car sales is still higher by around 3% than in 2019.
Need for aggressive policies
According to IEA, to overcome the sluggish progress in fuel efficiency improvement, aggressive policies are needed to address the rise in average vehicle size, prompted by increasing market shares of SUVs.
IEA cites the example of Europe, which India broadly follows in terms of emission regulations among other things, for possibly modeling policies to support and encourage cleaner mobility, and reduction of environmental impact.
Under a ‘Fit for 55’ initiative, the European Commission targets CO2 emission reduction by 55% for cars, and 50% for vans by 2030. The target for 2035 is 100%, which in other words would mean a complete shift to electric vehicles (EVs).
‘There is a direct correlation between a country’s long-term fuel prices and the average fuel economy of the vehicles its citizens purchase’, says the IEA report. Morocco has phased out road fuel subsidies in recent years, it notes, while adding that India, Mexico and Indonesia have been working on lifting them. Though there’s no data immediately available to directly correlate the impact, the rising trend of fuel prices in India is also said to be contributing to the growth of EVs, mainly electric scooters here.
The other recommended approach is additional taxes on ‘large, heavy cars’ as they can ‘disincentivise the sale of ever-larger and heavier vehicles’. Norway, which in 1955 implemented a one-off registration (purchase) tax on ICE light-duty vehicles based on vehicle kerb weight as well as CO2 and NOx emissions, and the more recent imposition of tax on vehicles weighing over 1,800 kg, but not applicable to BEVs and PHEVs are being cited as examples.
The Accelerated Corporate Average Fuel Economy (CAFE) norms could also play a key role in enhancing fuel efficiency of ICE vehicles and increasing their green quotient. India implemented CAFE norms from April 1, 2017, with a CO2 emission limit of not more than 130 gm per km by 2022. There’s an appeal by the Indian auto industry body Society of Indian Automobile Manufacturers (SIAM) to revise the Phase II introduction date to April 1, 2024. The proposal also includes the joint introduction of the CAFE II and the next phase of BSVI norms.
Additionally, a ‘feebate’ approach, which offers rebates to energy efficient products, and charges the not-so-efficient ones, is also recommended. France introduced a bonus-malus policy in 2008, which imposes a fee on purchase of vehicles with a higher than recommended CO2 emission level, and subsidises the purchase of vehicles that emit within the recommended limit.
The bottom line
In addition, the IEA suggests governments devise regulations and policies ‘to monitor and reduce the gap between real-world fuel economy and rated performance.’
All these steps would help ensure a better level of fuel efficiency improvement as the ICE vehicle industry still has some good distance to go before EVs become as common a sight as vehicles that run on fossil fuels. On the vehicle side, in a highly competitive market like India, which is also price sensitive to a good extent, the challenge will be for the R&D and engineering teams to take their frugal and innovative engineering capabilities to the next level and deliver the goods.
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