For vehicle fuel efficiency, what you see isn't necessarily what you get

“Kitna deti hai?” How much does it give?

It’s one of the most important factors on people’s minds when they purchase a new car, and a prime motivation for car companies to produce ever more fuel-efficient vehicles, trumpeting new technologies that promise savings for consumers.

But as a new report on passenger cars in Europe shows, reality does not always bear out those promises. Produced by a team led by my colleague Peter Mock, the report compared real-world fuel consumption and CO2 emissions data on nearly half a million vehicles, gathered from consumers, car clubs, and leasing companies across Europe, to the official “type approval” certification test values shown on new car labels. Their analysis showed that the difference between the official and real-world values has been steadily increasing for more than a decade. In 2001, real-world fuel consumption of the average car in Germany was about 1.07 times higher than the label value. By 2012, that had risen to 1.23. The story was largely the same for other European countries.

For India, a nation that follows Europe’s lead in vehicle regulations, this is an important warning sign. If actual fuel efficiency improvements due to proposed regulations were to fall far below expectations, it would not only be bad for consumers, it would also make India further dependent on imported oil.

There will always be some discrepancy between label (based on type approval testing) and real-world fuel consumption. Driving behavior and poor or crowded road conditions can’t easily be replicated in a lab. But these factors shouldn’t increase the gap between label and real-world fuel consumption over time.

As a first step toward heeding this warning from Europe, India should establish a database that allows consumers to input real-world fuel consumption data as soon as possible, before new passenger car fuel-efficiency regulations take effect in 2016. This crucial activity will allow for an assessment of the current gap between label and real-world fuel efficiency in India. With time, changes in this gap can be evaluated as well. Many European countries and the US have had easy-to-use online databases for years now. Creating one for India will benefit consumers, regulators, and the auto industry alike.

Second, India should implement strict test procedures for type approval fuel efficiency testing. For example, as the EU report notes, permitted variations in the determination of road-load coefficients necessary for type-approval testing were one reason why newer car models showed a reduction in fuel consumption during testing compared to older models. The effects of such “flexibilities” may differ between India and Europe, but India should ensure that there are no such weaknesses its own regulations that allow vehicle manufacturers to take advantage of the system in the future.

Last but not least, India should make use of the consumer input real-world fuel consumption database mentioned above to periodically update its regulations. One trend to keep in mind here is the growing number of accessories installed on vehicles as India becomes more affluent. Air conditioning is a given now. Future consumers may demand mini TVs, iPad docks, and Siri on board, all of which use up energy—and thus, fuel—but aren’t necessarily accounted for in type approval testing.

This is not to say that regulations must be overhauled every few years to keep up with changes in driving behavior or vehicle modifications. Even small tweaks may be enough to control the gap between label and real-world fuel consumption. A case in point is the US, where in 2008 the Environmental Protection Agency (EPA) simply revised the correction factor that adjusts test-lab fuel consumption measurements to make them closer to what consumers experience in real-world driving.

Compared to Europe, the US has done much better at matching the fuel efficiency shown on car labels with what consumers experience. In 2001 in the US, real-world fuel consumption of the average car was about 0.89 times that the label value (accounting for the 2008 change in correction factor). By 2011, that had risen to 0.96—not perfect, but at least preferable to Europe’s experience.

As for India, it has the opportunity to not only match what the US has done but to beat it. It can learn from the experiences of the US and Europe to strive to make the label-to-reality ratio as close as possible to 1.00—and keep it there.