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Executive summaryGlobal Fuel Economy Initiative 2021Vehicles are getting larger and more powerful, eroding progress on fuel economy. But even ifthey were not, we still would not be on track to achieving the 2030 GFEI fuel economy target.Improvements in fuel economy have slowed recently for two mainreasons: vehicles are becoming ever larger and more powerful, andefficient engines have not been adopted quickly enough tocompensate. At the same time, efficiency gains in conventionalinternal combustion engine vehicles are slowing down as theirremaining efficiency potential becomes more expensive andtechnically difficult to exploit.Increasing vehicle size and power has eroded as much as 40% ofthe fuel consumption improvements that would otherwise haveoccurred thanks to technical advances in vehicles and engines.Even if vehicles had not grown in size and power, however, theworld would still not be on track to meet the GFEI targets, astechnical improvements to conventional engines are not sufficientand their progress is slowing.Larger and more powerful carsAlternative powertrains can deliver strong emissionsreductionsBetween 2010 and 2019, sales-weighted average new light-dutyvehicles became 6.2% heavier, 20% more powerful and had a 7%larger footprint, with the most rapid increases in China. A key causeof this trend has been a shift from cars (sedans) to SUVs and lighttrucks. As SUVs are larger and heavier than conventional cars, theyrequire more power and consume on average nearly one-third morefuel than a medium-sized car. SUVs’ global share of new light-dutyvehicle sales rose from 20% in 2010 to 44% in 2019. Even inmarkets with high SUV sales, such as the United States, SUVscontinue to claim a larger share of the market. In Japan, on theother hand, the trend towards larger and heavier vehicles has beenfar more muted, in part due to longstanding policies promoting verysmall “kei-cars”. In addition, a high proportion of new cars sold arehybrid electric vehicles – 20% in 2019. As a result of these trends,the rated fuel economy of new light-duty vehicles sold in Japan hascontinued to improve.Hybrid electric vehicles deliver on average about one-third lowerfuel consumption than conventional gasoline internal combustionengine vehicles and offer a cost-effective option to considerablyimprove fuel economy of conventional vehicles. Battery electricvehicles achieve efficiencies two to four times higher than internalcombustion engine vehicles, with zero tailpipe CO2 or pollutantemissions. The energy and fuel efficiency of plug-in hybrids areintermediate, and depend critically on drivers’ charging and drivingpatterns. In 2019, only small shares of the light-duty vehicle markethad been claimed by hybrid (3%), plug-in hybrid (1%) and batteryelectric vehicles (1%), so they had little impact on overall emissionsperformance. But this is likely to change over the current decade.PAGE 10

Executive summaryGlobal Fuel Economy Initiative 2021Increasing vehicle weight and power have eroded up to 40% of improvements in fuel economyDecomposition of fuel consumption trends, 2010-2019Lge/100 kmUnited hnical improvements201902010Powertrain changes20196.55.72010201930Vehicle attributes changesIEA. All rights reserved.Note: Technical improvements refer to the decrease of fuel consumption in each powertrain, excluding the effect of changing vehicle weight and power. (The powertrain comprises theengine, transmission, driveshafts, differential and axles.) Powertrain changes refer to the impact on fuel economy due to changing sales shares of powertrains. Vehicle attributes referto the change in fuel consumption due to changing vehicle attributes (weight and power). The decomposition methodology is taken from Craglia and Cullen (2019). Europe includesFrance, Germany, Italy and the United Kingdom.Source: IEA analysis based on IHS Markit database.PAGE 11

Executive summaryGlobal Fuel Economy Initiative 2021Battery electric vehicles had the lowest global average greenhouse gas emissions across alllight-duty vehicle segments in 2019 and in 2030 projectionsIntegrating well-to-wheel greenhouse gas emissionsKey insights from extending the scope to well-to-wheelsComparing the greenhouse gas emissions impacts of vehiclesacross different fuel-powertrain options requires looking beyondtheir rated tailpipe CO2 emissions. A coherent and completecomparison requires analysing the emissions incurred across theentire life cycle, and includes both the “fuel-cycle” or “well-to-wheel”emissions (those incurred in supplying fuels and in vehicleoperations), and “vehicle-cycle” emissions – those incurred inmanufacturing vehicles and disposing of them at the end of their life(including recycling).The analysis shows that compared with the potential to reduce thecarbon intensity of electricity, there is limited scope for reducing thewell-to-tank emissions incurred in supplying oil products and naturalgas. Moreover, the well-to-tank portion accounts for only 14% to18% of total well-to-wheel greenhouse gas emissions ofconventional internal combustion engine vehicles.In extending the analytical scope to a well-to-wheel basis, this reportis a first step in extending the scope of the GFEI benchmarkinganalysis to include the emissions associated with producing,deployment of renewables and other low-carbon power generationand hydrogen production technologies are the foundation fordecarbonisation across the energy sector (and not only for zerotailpipe-emission light-duty vehicles). In all regions and in allscenarios, the tank-to-wheel emissions of electricity decrease by2030. Global tank-to-wheel emissions from supplying electricitydecline by 2030 from the 2019 level by more than 25% in the StatedBy contrast, for battery electric and fuel cell electric vehicles,emissions incurred in producing and delivering electricity andhydrogen constitute all operational (well-to-wheel) emissions. Rapidtransporting and delivering transport fuels to vehicles. 11Previous IEA publications, including the Global EV Outlook 2019 and The Role of CriticalMinerals in Clean Energy Transitions, compare the greenhouse gas emissions incurred bydifferent light-duty vehicle powertrains on a full life-cycle basis. The analysis upon which thisreport builds integrates the well-to-tank greenhouse gas emissions incurred in providing currentand future transport fuels into the IEA Mobility Model. Emissions incurred at each step along thefuel supply chain are estimated using IEA databases and modelling tools, as well as theGreenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) tooldeveloped by Argonne National Laboratory. Variability in well-to-tank greenhouse gas emissionsacross regions and technologies, as well as projections of how these develop in IEA scenarios,were developed for current and future potential road transport fuels.PAGE 12

Executive summaryGlobal Fuel Economy Initiative 2021Policies Scenario, 35% in the Announced Pledges Scenario andto change as governments continue to adopt additional policies todecarbonise the power sector as a means to meet their long-termdecarbonisation targets.75% in the Net Zero Emissions by 2050 Scenario.Specific well-to-wheel greenhouse gas emissions, estimated ingrammes of CO2 equivalent per kilometre (g CO2-eq/km) for eachfuel-powertrain combination over the fleet average lifetime, varyconsiderably across vehicle segments and regions, as well as byThis is reflected by the Announced Pledges Scenario, in whichbattery electric vehicles offer the deepest carbon reductions on awell-to-wheel basis in every instance, thanks to rapid reductions inthe carbon intensity of electricity generation. The clear couplingbetween power sector decarbonisation and battery electric vehiclesprovides a strong rationale for promoting battery electric vehicles asa technology for decarbonising light-duty vehicle operations to meetscenario.Emissions performance varies most widely in conventional gasolineand diesel internal combustion engine vehicles, reflecting the rangeof models and sizes sold in different markets.climate ambitions.For vehicles sold in 2019, a clear rank order in terms of globalaverage well-to-wheel greenhouse gas emissions performance isevident in the Stated Policies Scenario. Battery electric vehicleshave the lowest emissions, followed by plug-in hybrids andhydrogen fuel cell electric vehicles. Hybrid vehicles have the lowestwell-to-wheel emissions among compressed natural gas, diesel andgasoline internal combustion engines.The well-to-wheel greenhouse gas emissions of fuel cell electricvehicles vary depending mainly on how hydrogen is produced.Currently, well-to-wheel emissions of fuel cell vehicles driving onhydrogen produced via coal gasification can be as high as those ofgasoline internal combustion engine vehicles, while those usinghydrogen from natural gas steam methane reformation achievewell-to-wheel greenhouse gas emissions on par with hybrid electricvehicles. By 2030 in the Announced Pledges Scenario, as more andmore hydrogen is produced through electrolysers powered at leastThis rank order does not hold across all regions and all scenarios.In the Stated Policies Scenario, hybrid vehicles can emit less thanbattery electric vehicles sold in 2019 in those regions in which theelectricity mix relies particularly heavily on coal, although this is setin part via renewables, fuel cell vehicles in some regions can alsooffer near-zero well-to-wheel emissions.PAGE 13

Executive summaryGlobal Fuel Economy Initiative 2021Average rated fuel economy performance and well-to-tank carbon intensity of supplying fuelsdetermine well-to-wheel greenhouse gas emissions intensityWell-to-wheel greenhouse gas emissions ranges across regions and countries in the Stated Policies Scenario and Announced PledgesScenarioGASOLINEICEDiesel ICEGlobal weighted averageCNG ICEGasoline HEVCity car segmentGasolinePHEVBEVFCEVGASOLINEICEDiesel ICECNG ICEGasoline 0APS400STEPSAverage lifetime emissions for vehicles sold in 2030400STEPSgCO₂-eq/kilometreAverage lifetime emissions for vehicles sold in 2019FCEVLarge SUV / pick-up segmentIEA. All rights reserved.Notes: STEPS Stated Policies Scenario; APS Announced Pledges Scenario; NZE Net Zero Emissions by 2050 Scenario; ICE internal combustion engine; CNG compressednatural gas; HEV hybrid electric vehicle; PHEV plug-in hybrid electric vehicle; BEV battery electric vehicle; FCEV fuel cell electric vehicle. Black bars show the global weightedaverage well-to-wheel greenhouse gas emissions performance. Coloured columns show the range of performance across all five regions covered in detail in this report (China, Europe,the United States, Japan, and developing and emerging countries). Grey bars (2019 STEPS only) show the global weighted average performance of each powertrain in the city carsegment (lower bars) and large SUV segment (upper bars), respectively (except for CNG ICE vehicles and FCEVs, where bars show minimum and maximum values across allsegments sold).Source: IEA Mobility Model, September 2021 version.PAGE 14

Executive summaryGlobal Fuel Economy Initiative 2021Battery electric vehicles have the lowest well-to-wheel emissions in all segmentsRated well-to-wheel greenhouse gas emissions of new light-duty vehicle sales worldwide by size segmentg CO₂eq / kilometreAverage lifetime emissions for vehicles sold in 2019Average lifetime emissions for vehicles sold in cated renewables5050Gasoline Diesel ICE CNG ICEICEBEVFCEVGasoline Diesel ICE CNG olineHEVSTEPSAPSSTEPSNZEAPSSTEPSNZEAPSSTEPS- 50NZE- 50APS0STEPS0STEPSNetFCEVIEA. All rights reserved.Notes: STEPS Stated Policies Scenario; APS Announced Pledges Scenario; NZE Net Zero Emissions by 2050 Scenario. CCUS carbon capture utilisation and storage. ForFCEVs, the red dots show the well-to-wheel greenhouse gas emissions incurred if hydrogen were to be produced via electrolysis with dedicated renewable sources. The height of thestacked column shows instead total well-to-wheel emissions of fuel cell electric vehicles considering current and projected share of hydrogen production pathways. Therefore, thedifference between the red column and the total indicates the theoretical well-to-wheel greenhouse gas emissions reduction potential of FCEVs. The carbon intensity of globalelectricity generation improves 26% between 2019 and 2030 STEPS and a further 30% between 2030 APS and 2030 STEPS. The utility factor of PHEVs is assumed to improve by sixpercentage points between 2019 and 2030 STEPS and by a further nine percentage points between 2030 STEPS and 2030 APS. 2019 STEPS considers a vehicle sold in 2019 withwell-to-tank intensities evolving in line with the STEPS trajectory, while 2030 APS considers a vehicle sold in 2030 with the well-to-tank intensities evolving in line with the APStrajectories.Sources: IEA analysis based on IHS Markit and the IEA Mobility Model (2021 September version).PAGE 15

Executive summaryGlobal Fuel Economy Initiative 2021Ten recommendations to align light-duty vehicle efficiency and greenhouse gas emissions withclimate goalsEnsure that regulations are based on and translate to realworld performance. Continued monitoring of the gap betweenScale up fuel economy standards and electrification targets tosupport announced net zero emissions ambitions. Marketdiffusion of vehicle efficiency technologies needs to nearly triple itspace to align operational greenhouse gas emissions of light-dutyvehicles with climate pledges. Standards are needed to promoteefficiency technologies in conventional internal combustion enginevehicles, and sales share targets for zero-emission vehicles. Whileseparate standards and zero-emission vehicles sales targets canreinforce each other, linking the two in a single regulation carriesthe risk of creating a regulatory loophole: zero-emission vehiclesales generate compliance credits, relaxing fuel economy standardsfor a manufacturer’s remaining fleet. This loophole can be closed byphasing out multiple credits for zero-emission vehicles as electricvehicle shares grow.rated and real-world performance is needed to ensure that fueleconomy standards have their intended impact. Digital technologiescan lower costs and increase effectiveness of compliancemonitoring, which should then inform future regulations.Implement policies to counter the growth in vehicle weight andpower. Governments can draw upon existing policies in countriessuch as France, Japan and Norway, where vehicles sold haveconsistently been among the lightest and most fuel-efficientworldwide. In addition to high fuel taxes and standards for CO2emissions and fuel economy, these countries subsidise and/or taxvehicles according to their weight, size, or greenhouse gas andpollutant emissions, or a combination of these attributes.Phase out fuel subsidies and tax road fuels at levels thatreflect their impacts on people’s health and the climate. Fueltaxes provide consumers with incentives to buy fuel-efficientvehicles and improve the market prospects for conventional hybridsand zero-emission vehicles. Subsidies that reduce the costs ofsupplying oil and gas products to the road sector should be phasedout, with careful consideration of social implications in view of theimpacts on poorer parts of the population. Road fuels should betaxed at levels reflecting their impacts on people’s health and theclimate.Harness the potential of zero-emission vehicles. Zero-emissionvehicles, and in particular battery electric vehicles, are the mostefficient, cost-effective and sensible technology options forachieving deep reductions in well-to-wheel greenhouse gasemissions in the light-duty vehicles sector. A broad suite of policiestargeting vehicle manufacturers can accelerate the market adoptionof zero-emission vehicles and ensure that they contribute their fullpotential to reducing emissions.PAGE 16

Executive summaryGlobal Fuel Economy Initiative 2021Policies promoting plug-in hybrid electric vehicles need toencourage charging and driving patterns that realise thesevehicles’ full potential to reduce greenhouse gas and pollutantemissions. Trip-making and charging patterns can have acan inform broad strategies for decarbonising the transport sector(including in light-duty vehicles), specific policy instruments can besttarget improvements specific to each of the many regulatedindustries involved in the fuels and vehicles supply chains.Designing and enforcing separate but in some cases mutuallyreinforcing regulatory and fiscal instruments for different stages ofthe life cycle is the most promising means to achieving the rapidsubstantial impact on real-world plug-in hybrid fuel economy andelectricity, resulting in wide variability between rated and real-worldperformance. The key to ensuring that plug-in hybrids are driven onelectricity will be to tie regulations and incentives more closely toaction needed.real-world performance.Promote the adoption of low-carbon fuels, especially directelectrification. Reducing the emissions from generating electricityHarmonise standards beyond the national level. Internationalco-operation and harmonisation of standards can lower the costs ofimplementing and enforcing regulations such as fuel economystandards. They also provide a valuable basis for engagement toachieve broader societal and environmental goals, including climateand producing hydrogen is the foundation of decarbonising theenergy sector, and of ensuring that zero-emission vehicles performto their full potential. Different policies are appropriate to integraterenewables and decarbonise electricity, depending on the currentstatus and mix of electricity generation and energy storage. Withinthe scope of fuel supply, policies that promote fuels with lowe

This report presents the latest update to the Global Fuel Economy Initiative's biannual benchmarking report on light-duty vehicle sales. The report tracks the progress of fuel economy of new light-duty vehicles, providing the latest insights based on a rich dataset covering about 85-90% of global light-duty vehicle sales and