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Looking back to look ahead: India’s fuel consumption standards
India’s Ministry of Road Transport and Highways (MoRTH) recently released a summary report on the compliance of the 2017-2018 passenger car fleet with the country’s fuel consumption standards. While the data contained in the summary is sparse, particularly when compared to what other countries make available, it does give some insight into if manufacturers are on track to meet emissions targets, as well as what Indian regulators should look at when setting its next round of standards.
The table below lists the manufacturer fleet average CO2 emissions reported in the MoRTH summary, contrasts the data with the regulatory targets, and compares the results with our recent 2018 compliance estimates.
Note: We use the average fleet weight in fiscal year 2015-2016 to define the 2022-2023 targets
Both the summary report and our estimates show that all manufacturers are in compliance with 2017-2018 corporate average CO2 emission standards. One manufacturer, BMW, has have already achieved the 2022-2023 standards, and two (Suzuki and Ford) are very close to being in compliance. However, our estimates differ from the MoRTH summary of the CO2 performance of Tata Motors, Renault, Ford, and Toyota by between approximately -4% and -13%. Since the MoRTH summary report does not provide vehicles sales by manufacturer, I cannot calculate fleet sales-weighted average CO2 performance based on MoRTH data and compare it with ICCT’s estimation of 120.6 g/km (or 122.4 g/km using MoRTH CO2 performance data and ICCT sales data).
A number of manufacturers with annual sales below 5,000, including Volvo, Isuzu, Force Motors, and Mitsubishi, are classified as small-volume manufacturers and thus were subject to more lenient targets in the 2017-2018 period (General Motors has since exited the Indian market). These manufacturers have the capacity to introduce more efficient models, but small-volume manufacturers are allowed a baseline of much higher CO2 emissions. This means they are exempt from bringing more efficient models, such as hybrid or electric vehicles, to the Indian market until 2022-2023.
While the data in the report does give good insight into the fleet performance in India, there is room for more complete disclosure. The table below compares the information provided in fuel economy reports of the United States, the European Union, and India. The International Centre for Automotive Technology (ICAT), the agency designated by MoRTH to collect fuel efficiency data from manufacturers according to the compliance requirements, has access to all the data points listed, but the summary does not provide these details. A complete compliance report, including additional information on sales, average curb weight, application of compliance flexibilities by manufacturer, and analysis of sales weighted averages by market segment and fuel type, would help to better track progress on vehicle fuel efficiency. However, while not a complete picture, the information contained in the MoRTH summary compliance report does flag a few outstanding issues.
* Information is not directly included but can be derived from provided information
The standard specifies the 2022–2023 target will be revised if the average fleet average weight in calendar year 2016 is less than the estimated 1,145 kg. The MoRTH summary shows a fleet average weight of 1,093 kg for FY 2017-2018 and our estimate shows a fleet average weight of 1,103 kg for FY 2015-2016. Based on these two estimates, the average weight for calendar year 2016 will likely be less than 1,145 kg. Thus, MoRTH should announce the average unladen weight it will use to determine compliance to 2022-2023 standards, based on calendar year 2016 data.
Second, the India 2017-2018 fleet is far ahead of complying with the fuel consumption standards– half of the fleet is only 4% away and total fleet is around 8.7% away from meeting 2022-2023 standards. India should begin to develop significantly more stringent standards to promote more advanced technologies. Looking at the other leading vehicle markets, the EU has set standards for 2025 and 2030 and Japan just announced standards for 2030. Thus, India should look to the creation of the next set of fuel consumption standards.
Finally, India recently announced plans to greatly accelerate electric vehicle (EV) uptake. The existing EV incentives scheme provides financial support, but primarily focuses on commercial vehicles rather than private vehicles. The fuel consumption standards award manufacturers excessive compliance flexibility for EVs, but we found that the impact of preferential emissions accounting methods and prevailing super-credit multipliers for EVs is much smaller on the fleet when the EV market share is low. Thus, tightening standards, especially from the existing lenient standard baseline, is not likely to bring large amount of EVs to the market in the short term. Because none of the existing EV policies would enable transformational market shifts, India should consider imposing ZEV mandates on manufacturers, which have proven effective in stimulating EV uptake in other leading auto markets.
