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TRENDS IN THE

GLOBAL VEHICLE

FLEET 2023

MANAGING THE SUV SHIFT

AND THE EV TRANSITION

ACKNOWLEDGMENTS

The project was developed at the European Transport and Energy Research Centre of the Institute of Transportation

Studies, University of California, Davis, and managed by Pierpaolo Cazzola.

This report was authored by Pierpaolo Cazzola, Leonardo Paoli, and Jacob Teter. All authors contributed to the

development of the data processing methodology, building on earlier experiences, in particular with previous GFEI

benchmarking reports. Leonardo Paoli led on updating the data and making them publicly available.

Sheila Watson (FIA Foundation) provided feedback on the draft report and John Pap (FIA Foundation) managed the

editorial process.

The authors would like to thank peer reviewers who provided essential feedback to improve the quality of the report.

They include Elizabeth Connelly (IEA [International Energy Agency]); Matteo Craglia (International Transport

Forum); Francois Cuenot (United Nations Economic Commission for Europe); Eduardo Espitia Echeverria (World

Bank); Lew Fulton (University of California, Davis); Mathilde Huismans (IEA); Alex Körner (United National

Environment Programme); Aditya Ramji (University of California, Davis), María Santos Alfageme (Instituto Superior

Técnico, Lisbon); Jules Sery (IEA); and Jacopo Tattini (Joint Research Center, European Commission).

The project was funded by the FIA Foundation.

Design by Diana Fauner and John Rigby.

Photography by Alamy, Getty Images, iStock and Shutterstock.

DOI: 10.7922/G2HM56SV

Dataset on Zenodo. DOI: 10.5281/zenodo.10148349

November 2023

TRENDS IN THE

GLOBAL VEHICLE

FLEET 2023

MANAGING THE SUV

SHIFT AND THE EV

TRANSITION

TRENDS IN THE GLOBAL VEHICLE FLEET 2023 - MANAGING THE SUV SHIFT AND THE EV TRANSITION

Executive Summary

1 Introduction

2 Key developments in light-duty vehicle markets

2.1 New sales of passenger cars and light commercial vehicles

2.2 Energy eciency of new vehicles

2.2.1 Technical determinants of the energy eciency of vehicles

2.2.2 Tailpipe carbon emissions of new light-duty vehicles

2.3 Vehicle sales by powertrain

2.4 Vehicle sales by segment

2.5 Vehicle size and weight

3 Analysis of the vehicle market developments and implications for policy action

3.1 Impacts of the shift towards SUVs

3.1.1 Energy and CO2 emissions

3.1.2 Vehicle weight

3.1.3 Road safety

3.1.4 Equity

3.2 The role of EVs in the shift towards SUVs

3.3 Impacts of the EV transition

3.3.1 Energy and CO2 emissions

3.3.2 Vehicle weight

3.3.3 Road safety

3.3.4 Equity

3.4 Are SUVs and EVs increasing the risk of a global divide?

3.5 Need for policy action to address existing challenges

4 Policy options

4.1 Regulatory policy frameworks on energy, environment and safety

4.1.1 Environmental regulations

4.1.2 Road safety regulations

4.1.3 Use of regulations in vehicle trade

4.1.4 Urban access restrictions

4.1.5 Targeted regulatory requirements for speciﬁc usage proﬁles

4.2 Regulatory changes to address vehicle weight increases and equity-related

challenges

4.2.1 Regulations on vehicle footprint

4.2.2 Regulations on battery capacity

4.2.3 Other regulatory requirements applying speciﬁcally to batteries

4.2.4 Changes in existing environmental regulations

4.2.5 Changes in existing road safety regulations

4.2.6 Changes in targeted regulatory requirements for speciﬁc usage proﬁles

CONTENTS

4.3 Vehicle taxation

4.3.1 Country-level taxation frameworks

4.3.2 Key examples of country-wide dierentiated vehicle registration taxes

4.3.3 Vehicle taxation related to international trade

4.3.4 Local vehicle taxes and charges

4.4 Changes in vehicle taxes to address vehicle weight increases and equity-related

challenges

4.4.1 Changes in country-level taxation frameworks

4.4.2 Changes in vehicle taxation related with international trade

4.4.3 Changes in local vehicle taxes and charges

4.5 Fuel taxation and carbon prices

4.5.1 Road user charges to complement or progressively replace fuel taxation

4.6 Alternative energy infrastructure (EV chargers)

4.7 Sustainable ﬁnance and development aid funding

Annex: Methodological note

A.1 Description of data sources

A.1.1 Fuel economy in major car markets (2005-2017) data, GFEI_0517

A.1.2 GFEI 2021 data, IEA_19

A.1.3 Automotive sales data from Marklines

A.1.4 CO2 emissions from cars and vans, EEA, EEA

A.2 Description of data processing steps

A.2.1 Preparing Marklines sales data

A.2.2 Preparing IEA speciﬁc energy consumption data

A.2.3 Preparing EEA data

A.2.4 Matching of powertrain categories with Marklines categories

A.2.5 Joining speciﬁc energy consumption, weight, and footprint data to sales

data

A.2.6 Improvements in ICE vehicle eciency technologies

A.2.7 Mismatch between vehicle factory shipments and registrations in China

A.3 Applying new WLTC corrections

A.3.1 Re-benchmarking NEDC to WLTC conversion factors

A.4 Regional aggregations

Abbreviations and acronyms

Units of measure

References

Endnotes

/45

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TRENDSINTHEGLOBALVEHICLEFLEET2023MANAGINGTHESUVSHIFTANDTHEEVTRANSITIONACKNOWLEDGMENTSTRENDSINTHEGLOBALVEHICLETheprojectwasdevelopedattheEuropeanTransportandEnergyResearchCentreoftheInstituteofTransportationFLEET2023Studies,UniversityofCalifornia,Davis,andmanagedbyPierpaoloCazzola.MANAGINGTHESUVThisreportwasauthoredbyPierpaoloCazzola,LeonardoPaoli,andJacobTeter.Allauthorscontributedtothedevelopmentofthedataprocessingmethodology,buildingonearlierexperiences,inparticularwithpreviousGFEISHIFTANDTHEEVbenchmarkingreports.LeonardoPaoliledonupdatingthedataandmakingthempubliclyavailable.TRANSITIONSheilaWatson(FIAFoundation)providedfeedbackonthedraftreportandJohnPap(FIAFoundation)managedtheeditorialprocess.Theauthorswouldliketothankpeerreviewerswhoprovidedessentialfeedbacktoimprovethequalityofthereport.TheyincludeElizabethConnelly(IEA[InternationalEnergyAgency]);MatteoCraglia(InternationalTransportForum);FrancoisCuenot(UnitedNationsEconomicCommissionforEurope);EduardoEspitiaEcheverria(WorldBank);LewFulton(UniversityofCalifornia,Davis);MathildeHuismans(IEA);AlexKörner(UnitedNationalEnvironmentProgramme);AdityaRamji(UniversityofCalifornia,Davis),MaríaSantosAlfageme(InstitutoSuperiorTécnico,Lisbon);JulesSery(IEA);andJacopoTattini(JointResearchCenter,EuropeanCommission).TheprojectwasfundedbytheFIAFoundation.DesignbyDianaFaunerandJohnRigby.PhotographybyAlamy,GettyImages,iStockandShutterstock.DOI:10.7922/G2HM56SVDatasetonZenodo.DOI:10.5281/zenodo.10148349November2023CONTENTSExecutiveSummary14.3Vehicletaxation454.3.1Country-leveltaxationframeworks451Introduction54.3.2Keyexamplesofcountry-widedifferentiatedvehicleregistrationtaxes454.3.3Vehicletaxationrelatedtointernationaltrade462Keydevelopmentsinlight-dutyvehiclemarkets64.3.4Localvehicletaxesandcharges472.1Newsalesofpassengercarsandlightcommercialvehicles64.4Changesinvehicletaxestoaddressvehicleweightincreasesandequity-related482.2Energyefficiencyofnewvehicles8challenges2.2.1Technicaldeterminantsoftheenergyefficiencyofvehicles114.4.1Changesincountry-leveltaxationframeworks482.2.2Tailpipecarbonemissionsofnewlight-dutyvehicles134.4.2Changesinvehicletaxationrelatedwithinternationaltrade492.3Vehiclesalesbypowertrain134.4.3Changesinlocalvehicletaxesandcharges502.4Vehiclesalesbysegment154.5Fueltaxationandcarbonprices502.5Vehiclesizeandweight194.5.1Roaduserchargestocomplementorprogressivelyreplacefueltaxation514.6Alternativeenergyinfrastructure(EVchargers)523Analysisofthevehiclemarketdevelopmentsandimplicationsforpolicyaction214.7Sustainablefinanceanddevelopmentaidfunding543.1ImpactsoftheshifttowardsSUVs213.1.1EnergyandCO2emissions21Annex:Methodologicalnote553.1.2Vehicleweight21A.1Descriptionofdatasources553.1.3Roadsafety23A.1.1Fueleconomyinmajorcarmarkets(2005-2017)data,GFEI_0517553.1.4Equity23A.1.2GFEI2021data,IEA_19553.2TheroleofEVsintheshifttowardsSUVs25A.1.3AutomotivesalesdatafromMarklines553.3ImpactsoftheEVtransition26A.1.4CO2emissionsfromcarsandvans,EEA,EEA573.3.1EnergyandCO2emissions26A.2Descriptionofdataprocessingsteps573.3.2Vehicleweight27A.2.1PreparingMarklinessalesdata573.3.3Roadsafety30A.2.2PreparingIEAspecificenergyconsumptiondata573.3.4Equity31A.2.3PreparingEEAdata573.4AreSUVsandEVsincreasingtheriskofaglobaldivide?31A.2.4MatchingofpowertraincategorieswithMarklinescategories593.5Needforpolicyactiontoaddressexistingchallenges32A.2.5Joiningspecificenergyconsumption,weight,andfootprintdatatosales59data4Policyoptions35A.2.6ImprovementsinICEvehicleefficiencytechnologies594.1Regulatorypolicyframeworksonenergy,environmentandsafety37A.2.7MismatchbetweenvehiclefactoryshipmentsandregistrationsinChina594.1.1Environmentalregulations37A.3ApplyingnewWLTCcorrections604.1.2Roadsafetyregulations39A.3.1Re-benchmarkingNEDCtoWLTCconversionfactors614.1.3Useofregulationsinvehicletrade40A.4Regionalaggregations614.1.4Urbanaccessrestrictions404.1.5Targetedregulatoryrequirementsforspecificusageprofiles40Abbreviationsandacronyms664.2Regulatorychangestoaddressvehicleweightincreasesandequity-related40Unitsofmeasure66challenges4.2.1Regulationsonvehiclefootprint41References674.2.2Regulationsonbatterycapacity414.2.3Otherregulatoryrequirementsapplyingspecificallytobatteries41Endnotes774.2.4Changesinexistingenvironmentalregulations424.2.5Changesinexistingroadsafetyregulations444.2.6Changesintargetedregulatoryrequirementsforspecificusageprofiles44TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITIONEXECUTIVESUMMARY2022.TheyearlyrateofenergyefficiencyimprovementSportUtilityVehicles(SUVs),underpinningincreasesinbetween2019and2022wasmorepronounced(closelarger,heavier,andmorepowerfulvehicles,hascontinuedThisisthelatestupdateofabenchmarkingreportlookingdecreasedinallmajorcarmarketsfrom2019toto6%)inmarketswhereEVsalesincreasedthemost,inmajorautomotivemarketsandacrossnearlyallatthespecificfuelconsumptionoflight-dutyvehicles2022,improvingatanaverageyearlyrateof3.2%namelyChinaandEurope.InNorthAmerica,lowercountries(FigureES3).In2022,salesofSUVsovertook(LDVs).Whilereportingdatastartingin2005,itfocusesandreaching6.9Lge/100kmin2022(0.64kWh/uptakeofEVsandacontinuedtrendinsalesoflargerandsalesofconventionalcarsatagloballevel,reachingonchangesthatoccurredbetween2019and2022.km).Thisisadoublingoftheaverageimprovementheaviervehicleshasresultedinayearlyimprovementrate51%ofthetotal.Globally,theaveragevehicleweightofrateobservedbetween2005and2019(1.6%)(Figureof1.6%.IncountrieswhereEVsarenotwidelydeployed,LDVshasalsoreachedanall-timemaximum,at1530Keydevelopmentsincludea15%contractionofglobalES1).DirectCO2emissionshavedeclinedevenfaster,annualimprovementratesarealsocloseto1.5%.kg.Averagefootprinthasstagnatedafter2019/2020atLDVsalesin2020asaconsequenceofthepandemic,atarateof2.1%peryearbetween2005and2022,about4.2m2.Increasestookplaceinlow-andmedium-andalimitedrecoveryinsalesthrough2022.TheaselectrificationaffectscarbonemissionsmorethanTheefficiencyofnewvehiclesisalsolinkedwiththesize,incomecountries,typicallystartingfromalowerbaseline.sales-weightedspecificenergyconsumptionofLDVsenergyconsumption.weight,andpowerofnewcars.Along-termshifttowardsLimiteddeclinesoccurredmainlyinChinaandEurope.FIGUREES1:TrendsinthespecificenergyconsumptionofnewlightdutyvehiclesinmajormarketsFIGUREES2:GlobalLDVsalessharesbypowertrainSalesshare12Lge/100km1.1290100%kWh/km75%gCO/km27050%1125%0.92500%20052006200720082009201020112012201320142015201620172018201920202021202210BatteryElectricPlug-inHybridHybridMildHybridICEPetrolICEDieselICEOther9230Note:ICEstandsforinternalcombustionengine.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.0.7210819070.617060.415051304110200250062002700820092010201120122013201420152016201720182019202020221022200250062002700820092010201120122013201420152016201720182019202020221022ChinaNorthAmericaEuropeJapanOtherCountriesWorldNotes:Lgestandsforlitresofgasolineequivalent,anditisusedtostandardisefuelconsumptionaccordingtotheirvolumetricenergyFIGUREES3:GlobalLDVsalesbysegmentcontent,likekWh/km.Thereare9.3kWhperLge.HistoricalspecificenergyconsumptionvalueshavebeenbenchmarkedaccordingtonewunderstandingoftheratiobetweenNEDCandWLTPtestcycleenergyintensityandCO2emissionsperformance.Thisrevisionhasimprovedthe100%real-worldrepresentativenessofthereportedspecificenergyconsumption.SalesShare75%Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.50%25%TheglobalaverageannualrateofenergyintensityTherapidaccelerationinenergyefficiencyseeninrecent0%reductionsintheperiodfrom2020to2022yearsismainlyduetotheuptakeofelectriclight-duty200520062007200820092010201120122013201420152016201720182019202020212022was4.2%.Ifthisrateofimprovementcouldbevehicles(EVs,whichincludebothbatteryelectricvehiclessustainedthrough2030,itwouldbringLDVsvery[BEVs]andplug-inhybrids[PHEVs])(FigureES2).LargeSUVSmallSUVSmallCarMediumCarclosetomeetingtheGFEItargetofdoublingtheElectricpowertrainsconsumethreetosixtimeslessLargeCarLCVUnclassiﬁedShareSUVenergyefficiencyofnewLDVsalesby2030fromaenergythaninternalcombustionenginevehiclestocover2005baseline.aunitofdistanceandtheirsalessharereached15%inSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.1TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION2ThetwomaintrendsunderpinningdevelopmentsinPOLICYOPTIONSAdaptingexistingpolicyandregulatoryinstruments•Sustainablefinanceframeworks,importanttohelptheglobalcarmarket–amarketshifttowardsSUVscanalsohelpaddresstheseissues.achieveabetteralignmentbetweenthedecisionsandthetransitiontowardEVs–havefar-reachingManagingthesedevelopmentsrequiresabroadrangetakenbyinvestors,corporationsandotherentities,implicationsfortheautomotiveindustry,aswellasofpolicyactions.•Vehicletaxationreforms–includingthecanbenefitfromupdatesintheirtaxonomiesontheenvironmentandsociety.integrationofweightandpricesasmodulatingregardingweight-relatedattributesofvehicles.•Theadoptionandcontinueddevelopmentofparametersforvehiclestaxesandcharges,Shiftstolargerandheaviervehiclesledtoincreasedfundamentalpre-requisites:technicalstandards,atthenationalandatthelocallevels–can•Financialinstrumentsdesignedtofacilitateoilconsumption,directCO2emissionsandvehicleincreasedlow-carbonelectricityavailability,andhelpsteervehiclemarketsawayfromSUVsaccesstoEVsforcapital-constrainedhouseholdsweight,sizeandpower.Withouttheshifttowardsremovaloffossilfuelsubsidies.andencourageEVadoptionwithoutreducingandsmallbusinesses,aswellasinitiativesSUVs,energyuseperkmforcombustionenginegovernmentbudgets.favouringaccesstocapitalatlowercost,arevehiclescouldhavefallenatanaverageannualrate•Acoherentpolicyframeworkisalsoneededcrucialtohelpfavouringanequitabletransition,thatis30%higherthanitdidfrom2010to2022.beyondtailpipeemissions,takingaholistic•Fossilfueltaxesandcarbonpricingmechanismsdomesticallyandinternationally.IntheabsenceoftheSUVshift,vehicleweightapproachtoaddressimpactsofLDVproductionofferimportantopportunitiestoprovideeconomicincreasesforthesesamevehiclescouldalsohaveandoperationsfromalifecycleperspective.incentivesforEVs.IncentivesneedtobetargetedWhileitisalsotechnicallyfeasibletomakeprogressbeenmorethanhalved.onmorevulnerablehouseholdsandbusinesses,byreformingtraderulesandtariffsappliedtocriticalNovelregulatorymechanismscanaddressissuesfacilitatingamoreequitableandinclusiveminerals,EVbattery,andvehicles,progressonthisImpactsoftheSUVshiftonenergyuseanddirectrelatedtoincreasedvehiclesizeandweight.transition.TheycanbefinancedfromrevenuesdependsupontheeffectivenessofthedialogueandemissionsofCO2perkmarebeingoffsetbyincreasedfromfossilfueltaxesandcarbonpricing.negotiationstakingplaceattheintergovernmentalelectrification,thankstomarkedlylowerspecificenergy•Theintroductionofacaponvehiclefootprint,inlevel.Possibleimprovementstotrade-relatedpoliciesconsumptionversuscombustionvehicles.absolutetermsandasasales-weightedaverage,•Regulatoryandfiscalmeasuressupportingonvehiclesincludedifferentiatedtariffsbasedonpairedwithnetdeclinesgoingforward,tolimituniversalaccesstoEVcharginginfrastructurepowertrain,batterysize,energyefficiency,GHGElectricvehicleshowevertendtoweighmorethanandthenreversetheSUVshift.areneededtoenableconsumerstogainmoreemissions,vehicleweightandfootprint.Theyarefeasiblecombustionvehicles,andtheirrisehasaddedtotheconfidencetoundertakealargershareoftheiraslongasthedifferentiationalignswithrulesoforigin,weightincreasescomingfromtheshiftfromsmall•Corporate-averageregulatoryrequirements,tripsevenwithashorterrange,therebyalsoenvironment-andnationalsecurity-relatedexceptionsandmediumcarstoSUVs.similartothoseinplaceforfueleconomyoraddressingweight-relatedchallengesforEVs.foreseenbytheWorldTradeOrganization(WTO).CO2emissions,havingbatterycapacity(kWh/Despiteincreasesindisposableincomeofvehicle)astheregulatedparameter.Thesehouseholdsworldwide,theSUVshiftwascouldbeespeciallyeffectivetocomplementinstrumentalforanincreaseinoriginalequipmentthefootprintregulationstoreversetheSUVmanufacturers(OEM)profitabilitythatremainedshift,addressingcriticalmineralissuesfrominplaceevenafterthecontractionobservedinthethedemandsideandequityissuesspecificallyglobalLDVmarket.This,however,alsoresultedinrelatedwithEVsthroughproductdiversification,relevantaffordabilityandequitychallengeswithinwhileleavingroomforinnovationinbatteryandacrosscountries.HigherinvestmentcostschemistriesandprovidingflexibilityinneededforEVsexacerbatedthesechallenges,evencompliancestrategiesforautomakers.ifsavingsfromlowerenergyandmaintenancecostsforEVshelptomitigatethiseffectonatotalcostof•Theuseofvehiclefootprint,ratherthanweight,ownershipbasis.isalsosuggestedasthebestchoiceasamodulatingparameterinexistingregulationsLegacyOEMshavebeenslowtoentertheEVmarket,onspecificenergyconsumptionordirectCO2especiallyinsmallersegments,despitetheriskofemissions,alongsidetightenedrequirementsexposuretolong-termlossesofmarketsharestoforlargervehicles(includingbothICEVsandChinesecompetitors.Reasonsincludethenear-termEVs).Thisisbecauseregulatingbasedonfocusonhigherprofitability,thecostofthebatteriesfootprintcanincentivizelightweightingasanforBEVsandcomplexpowertrainsforPHEVs,energyconsumptionreductionstrategy,whereaschallengesinthedevelopmentofnewbatterysupplyweight-basedregulationsfailtodothis.chainsandlargecapitaloutlaysforinvestmentinnewindustrialfacilities.ThisreportproposesalsototargetmorestringentenvironmentalandsafetyregulationsonhighlyutilizedEquity-relatedchallengesandgreaterexposurevehiclessuchascompanycars,taxis,governmentoflow-incomehouseholdsandbusinessestothefleets,andride-andcarsharingservices.MeasurescombinedmarkettransformationtowardsEVsandrequiringhigherEVmarketsharesandincentivizingSUVspointtowardsthepossibilityofagrowingelectricvkmintheseusecasescanenhanceefficiencyglobaldivide,notonlywithindifferentincomegroupsintheuseofmineralsforEVbatteriesandmayalsowithincountries,butalsobetweenmajordevelopedgeneratepositivespilloversintermsofequity.economiesandothercountries.3TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION41INTRODUCTION2KEYDEVELOPMENTSINLIGHTDUTYVEHICLEThisreportisthelatestupdateandsixthinstalmentChina,Europe,Korea,JapanandNorthAmerica,1MARKETSoftheGlobalFuelEconomyInitiative’sbiannualresultinginsubstantialenergyintensityandGHGbenchmarkingreportonlight-dutyvehiclesales,emissionreductions.2.1NEWSALESOFWorldwide,thesalesoflight-dutyvehicles(LDVs)extendingtheanalysisfrom2019through2022.PASSENGERCARSAND–includingpassengercarsandlightcommercialPreviousreportstrackedthetechnical,market,andChapter3analyseskeydeterminantsoftheobservedLIGHTCOMMERCIALvehicles2–steadilyincreasedthrough2017,andthenpolicydriversoffueleconomyandCO2emissionsmarketdevelopments,withaspecificfocusontheVEHICLESsloweddownthrough2019(Figure1).Longterm-performanceofnewlight-dutyvehicles(LDVs)atshifttowardsSUVsandtheincreaseinEVshares.IttrendsweredisruptedbytheCovid-19pandemicinacountry,regional,andgloballevel(Cuenotandexaminesthebroaderimpactsofthesedynamics,2020,whichresultedinarapiddropofsalesacrossFulton,2011,CuenotandKörner,2013,IEA,2019a,focusingonvehiclesize,weight,andpriceincreases,allregions:globally,15%fewerLDVsweresoldinandIEA,2021a).Thesereports,togetherwithotherandconsidersaspectsrelatedwithenergy,emissions2020thanin2019.Following2020,salesrebounded,GFEIanalyses(Cuenot,2017),havedocumentedtheofCO2andlocalairpollutants,roadsafety,demandforbutarestillaround10%lowerthantheywerebeforerisingmarketsharesofSportUtilityVehicles(SUVs),mineralsresources,andequity.thepandemic.andmoregenerally,oflargerandheaviervehicles,andanalysedtheimpactofthesetrendsonenergyThefollowinganalysis,inChapter4,reviewspoliciesFIGURE1:GlobalLDVsalesbyregion2005-2022efficiencyandCO2emissionsinmajorLDVmarkets.alreadydevelopedbygovernmentstoaddresstheimpactsofrecentmarketdevelopments,identifiesmillionunits100Thisreporttracksthiscontinuingtrend,highlightingbestpractices,andrecommendschangesandnew90keyimplications,includingreducedenergyandregulatoryinstrumentsthatarebestsuitedtoaddress80resourceefficiency,increasedvehicleproductionthechallengesdiscussedinChapter3,placinga70costsandreducedaffordabilityforvehicleowners–greateremphasisonsolutionsthathelpbridgetherisk60exacerbatinginequalitieswithinandamongcountriesofaglobaldivide.50–aswellasheightenedinjuryandmortalityrisksto40pedestrians,cyclists,andcardriversalike.ExaminingThemethodologicalapproachofthisupdatediffers30vehiclesalestrendsinlow-andmedium-incomefrompreviousGFEIbenchmarkingreports.Ratherthan20countries,thisworkalsoextendsthemesdevelopedrelyingonadatabasewithdetailedmodel-levelandin10intheUCDavisreportcommissionedbytheFIAsomecasestrim-leveldataandincludinganextensiveFoundationfortheZEVTransitionCouncil,“Facilitatinglistofvehicletechnicalparameters(e.g.,weight,0aTransitiontoZero-EmissionVehiclesintheGlobalfootprint,enginecapacity,numberofdoors,presence2005200620072008South”(CazzolaandSantosAlfageme,2023).ofefficiencytechnologiessuchascontinuouslyvariabletransmissions,turbochargers,etc.),thisdataChapter2illustratesthatthetendencytowardsupdatereliesonlowerresolutiondata(stillatthelargermarketsharesforvehiclesinlargerheaviermodellevel)fromMarklines.TheMethodologicalvehiclesegmentsispersistentandwidespread.AnnexoutlinesthemethodsusedtoensureascloseThesameanalysisalsoshowsarapidincreaseinaspossibleconsistencywithpreviousreports,andtovehicleelectrification,withstrongEVadoptioninverifytheaccuracyandvalidityofthisassessment.20092010201120122013201420152016201720182019202020212022ChinaNorthAmericaEuropeJapanandKoreaIndiaIndonesia,Thailand,Vietnam,SouthAfricaBrazil,Mexico,MalaysiaMiddleEastOtherCountriesNote:LDVsalesincludedinthisanalysisandinthisgrapharethoseforthecountrieslistedinannexTableA6.EuropeincludesallmembercountriesoftheEuropeanEconomicArea(EEA)plusSwitzerlandandtheUnitedKingdom.NorthAmericaincludestheUnitedStatesandCanadabutexcludesMexico,includedinthesamegroupasBrazilandMalaysia,astheyhavesimilarcharacteristicswithrespecttoGDPpercapita,whilestillhavingacomparablepopulationdensity,thepresenceofanautomotivemanufacturingcapacityandnotbeinganetimporterofoilandpetroleumproducts.Totalsalesforthissetofcountriesareequivalenttoroughly85%ofthetotalvehiclesalesaccountedbyOICA–includingcommercialvehicles(OICA,2023),meaningthattheyrepresentthevastmajorityoflightdutyvehiclesalesglobally.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.5TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION6Thereboundinsaleshasbeensloweddownbyacombinedshareofthesematuremarketsoutofthe2.2ENERGYandPHEVs,reflectingthefactthatelectricpowertrainsstretchedsupplychain–especiallyduetoashortageofglobalmarkethasdeclinedfromover70%in2005toEFFICIENCYOFNEWconsumethreetosixtimeslessenergytocoveraunitmicrochips–thathasstruggledtokeepupwithswingsunder50%in2022.VEHICLESofdistanceincomparisonwithpowertrainsreliantonindemand(JPMorgan,2023;Brinley,2023,Straughan,internalcombustionengines(ICEs)andtheirsalesshare2023;Burkackyetal.,2021;Burkackyetal.,2022).LDVsalesinNorthAmericadeclined14%in2020Thespecificenergyconsumptionofnewvehicleshasreached15%in2022.Shiftsinthemarketstructure,asdiscussedbelow,fromtheir2019level,andhavedroppedafurther5%decreasedsincethebeginningofthisbenchmarkingaccompaniedbychangesinvehiclepricesaslargersincethen,to13.9millionvehiclesin2022.Globalexercise.Theglobalsales-weightedaveragefuelTheyearlyrateofenergyefficiencyimprovementvehiclesareabovethoseofsmallerones,discussedsupplychainconstraintsandrapidinflation,withtheconsumptionforLDVssoldin2022was6.9Lge/100kmbetween2019and2022wasmorepronouncedininChapter3,arealsoinfluencingconsumerchoicespricesofnewcarsandtrucksrisingevenhigherthan(0.64kWh/km)6,nearly30%lessenergythanthevaluemarketswhereEVsalesincreasedthemost,namelyregardingtheacquisitionofanewvehicle,includingotherconsumergoods(BureauofLaborStatistics,in2005.In2020,GFEIpartnersreaffirmedtheirtargettoChina(5.9%)andEurope(5.8%).InNorthAmerica,throughpostponementofpurchases(GfK,2023;Shmuel,2023),justifythisreduction.5doubletheenergyefficiencyofnewLDVsalesby2030loweruptakeofEVsandacontinuedtrendinsales2022;Romei,2022)oranincreasedconsiderationoffroma2005baseline.Ifitcanbesustainedthroughoflargerandheaviervehicleshasresultedinayearlysecond-handoptions,wheretheyareavailable(RochInJapan,salesofLDVsdeclinedbymorethan10%2030,theglobalaverageannualrateofenergyintensityimprovementrateof1.6%.IncountrieswhereEVsareBaranowskietal.,2023;Manheim,2023).sincethepandemicandremainedroughlyconstantreductionintheperiodfrom2020to2022(4.2%)wouldnotwidelydeployed,annualimprovementratesarethereafter.bringLDVsveryclosetomeetingtheGFEItarget.closeto1.5%.TheChineseLDVmarkethasundergoneaveryrapidrisesincethebeginningofthecentury.ChinabecameInKoreathepandemicdidnotleadtoanyreductionWorldwide,thepaceofannualreductioninenergyFuelpricesandincomelevelsremainkeydeterminantstheworld’slargestLDVmarketin2009andfrominsales,buttherehasbeenasmalldeclinesinceconsumptionperkmdeclinedoverthe2010s,butofvehicleenergyuseperkm,leadingtosystemic2020through2022,withannualsalesof21million2020.In2022,KoreaandJapanaccountedfor8%markedimprovementscanbeseenfrom2019onwards,differencesacrossnationalandregionalmarkets,vehicles,ithasbecomebyfarandawaytheworld’sofglobalLDVsales,thesamesharetheyaccountedassalessharesofelectricvehicleshavebeguntorampasalreadyidentifiedinearlieranalyses(IEA,2019a,largestautomotivemarket,accountingfor29%offorpre-pandemic.upsubstantially(Figure2).TherapidaccelerationinIEA,2021a)andshowninFigure3.TheFigureshowsglobalLDVsalesin2022.Allthesame,China’ssalesenergyefficiencyimprovementsseeninrecentyearsisspecificenergyconsumptionplottedagainstgasolinepeakedin2017andhavesincebeenslowlydeclining.TheEuropeanmarkethasbeenslowerthanothersmainlyduetotheuptakeofEVs,whichincludebothBEVspricesandGDPpercapita,bothcorrectedbasedonSeveralfactors,oftenlimitinggrowthincarownership,torecoverfromtheimpactsofthepandemicduetopurchasingpowerparities.Resultsshowthathigherfuelhelpexplainwhythestabilizationofcarsalesoccurredregionalshortagesofvehiclecomponentsthatwereprices(andtaxes)7tendtobepairedwithlowerenergywhenthenumberofcarspercapitainChinaisstillaggravatedbyRussia’sinvasionofUkraine(VDA,consumptionperkmandalsothatspecificenergywellbelowthelevelsobservedineconomieswith2022).ThishasledEurope’sshareoftheglobalmarketconsumptionishigherincountrieswithlowerlevelsofhigherpercapitaincome.Thesereasonsinclude,intodeclinefrom21%in2019to18%in2022.fueltaxation,acrossdifferentlevelsofaverageincome.8additiontorecentsupply-chainchallenges:VehiclesalesinemergingmarketssuchasIndia,FIGURE2:Trendsinthespecificenergyconsumptionofnewvehiclesinmajorcarmarkets•theearlyphaseofatransitionfromagrowthIndonesia,andBrazilgrewsubstantiallybetweenmarketwheremostvehiclesweresoldtofirst-2005and2010,buttheirgrowthhassloweddownLge/100km12timeownerstoamature“replacement”market;since.In2022,thesemarketsaccountedfor22%ofglobalsales.Thepandemicandtheensuingeconomic11•significantinvestmentsinpublictransport,difficultieshavealsotakenatolloncarsalesintheseincludingurbanandintercityrailservices(Xinhua,countries,withadeclineof20%in2020.Saleshave102020;IEA,2019b;andOuetal.,2022);sinceregained7%,buttheyarestillbelowpre-pandemiclevels.Amongthesemarkets,theIndian9•thefrequentuseofpoliciesmanagingaccessmarkethasbeenparticularlydynamic,asitdeclinedbytopersonalvehiclesincities,alsoinlightoftheastaggering30%in2020buthassinceregainedalltransitiontovehicleelectrification(Feiqietal.,thelossesandsalesvolumesin2022exceedingpre-2020;Liuetal.,2022;Jinetal.,2023;andHeetpandemiclevels.al.,2018);and8•apro-activedeploymentofdigitally-enabledsharedmobilityservices(Yinetal.,2022).37The2020pandemicalsohadamuchsmallerimpact6intheChinesemarketthaninallothermarkets,withsalesonlydecliningaround5%yearonyear.Salesin5Chinahavesubsequentlyremainedfairlyconstant.4SalesinmaturemarketssuchasNorthAmerica,200520062007200820092010201120122013201420152016201720182019202020212022Korea,JapanandEurope4remainedmostlystagnantthrough2019.WithsalesincreasinginChinabynearlyChinaNorthAmericaEuropeJapanOtherCountriesWorldseven-foldin2020,relativeto2005(anddespitethedecreaseinsalesfrom2017onwards)andwithotherNotes:Datafrom2005to2017isbasedonFuelEconomyinMajorCarMarkets2005-2017(IEA,2019a),whilefrom2019onwardsdatafollowscountries,suchasIndia,Indonesia,andBrazil,thethenewmethodologyoutlinedintheannex.Theyear2018isshownastheaverageinvaluesbetween2017and2019.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.7TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION8FIGURE3:Evolutionofspecificenergyconsumptionandgasolineprice(left)andGDPpercapita(right),usingpurchasingpowerparities,2019-2022BOX1:9.09.0REVISEDBENCHMARKINGOFNEDCTOWLTCCONVERSIONAUSTRALIAUSA8.5FuelConsumption(lge/100km)CANADA8.5PHILIPPINESCANADAUSAFuelConsumption(lge/100km)RUSSIAPHILIPPINESRUSSIASpeed(km/h)CHILEAUSTRALIA8.0CHILE8.0ARGENTINAARGENTINA7.5BRAZILBRAZILMALAYSIACHINA7.5MALAYSIA7.0EGYPTCHINAToenableglobalcomparisonsacrosscountriesand140KOREAmajormarkets,fuelconsumptionandCO2emissions7.0dataareconvertedfromregionalornationaltestUNITEDKINGDOMGERMANYcyclestoasinglegloballyharmonizedtestcycle,theEGYPTWorldwideharmonizedLight-dutyTestCycle(WLTC).GERMANYUNITEDKINGDOMNEDCWLTP6.5FRANCEInearlierreports(from2016to2021),conversion6.5KOREAfactorsweretakenfrompowertrain-specific(i.e.1206.0INDIAITALYgasolineanddieselICE)zerointerceptregressionsITALYdevelopedbytheICCT(Kühlweinetal.,2014).105.5TURKEYJAPANThisapproachisrevisedhere,usingregressions6.0basedonactualtypeapprovaldataprovidingCO2100emissionsbasedonboththeNEDCandWLTCtestFRANCEINDIAcycles,asreportedbytheEuropeanEnvironmentalTURKEYAgency(EEA)forlight-dutyvehiclesregisteredJAPANacrossEuropebetween2019and2022.11Thisled80toarevisionofthegapbetweenNEDCandWLTC,5.5meaningthatitisnowlargerthanithadbeeninitiallyassessedin2014,inlinewithotherliterature(Pavlovicetal,2018,JRC,2023).605.05.0Table1highlightsthemaindifferencesinthe400.00.51.01.52.02.53.03.54.04.55.05.5assessmentofspecificfuelconsumptiondueto010203040506070thisupdate.Theseresults,basedonEEAdataGasolinePrice(2022USDPPP)andcomparedwiththoseofthe2014assessmentGDPPPPpercapita(thousand2017constantUSD)(Kühlweinetal.,2014),indicatethattheearlier20NEDCtoWLTCconversionfactorswerelowerbyLow-mediumincome,low-mediumfueltaxationLow-mediumincome,highfueltaxationafactorof1.05forgasoline-and1.20fordiesel-0Highincome,highfueltaxationHighincome,low-mediumfueltaxationpoweredLDVs,incomparisonwithupdatedvalues.47614822029236443650858065272479686894010121084115612281300137214441516158816601732Time(seconds)Notes:Arrowsshowthechangefrom2019to2022.Sources:Specificenergyconsumptionfromthisdataassessment(seetheAnnexforsourcesandmethods)Asinter-cycleconversionfactorsfortestcyclesGasolinepricesfromtheIEAenergypricesdatabase(IEA,2023a)GDPpercapitaPPPandPPPconversionsarefromtheWorldBankOpenDatausedindifferentregions(e.g.,betweenCAFEand(WorldBank,2023).JC08andNEDC)assessedin2014remainaccurate,thefactorssummarizedinTable1havebeenusedThetrendsinthespecificenergyconsumptionofnewEurope,IndiaandKorea)andhybridpowertrainstorebaseresultsassessedinearliereditionsofvehiclesshowninFigure2canbeanalysedlookingat(IEA,2019a).thiswork,whilemaintaininginter-cycleconversionthreephases.Thefirstspanstheyearsbetween2005factorsunchanged.and2017,thesecondrunsfrom2017to2020andtheBetween2017and2020,improvementsinratedthird(alsohavingimportantimplicationsforFigurespecificenergyintensityhavemostlystagnatedItisalsoworthhighlightingthatagapremains3)followstheyear2020.Figure4summarizeskeyatagloballevel,withaveragespecificenergybetweentheWLTCfactorsandreal-worldfueldevelopmentscharacterizingeachofthesephases,consumptionhovering7.5Lge/100km(0.7kWh/consumption,ashasbeenestablishedbyanumberconsideringthedevelopmentofkeydrivingfactorskm).Thisperiodofstagnatingimprovementscanbeofrecentassessments(Tietgeatal.,2017;Cragliaandtheirevolutionovertheyears.largelyexplainedbytwocounteractingdrivers.andCullen,2019;IEA,2019a;Dornoffetal.,2020;Komnosetal.,2022).Between2005and2017,averagefuelconsumption•Ontheonehand,newvehiclesbecamelarger,declinedatayearlyrateof1.8%,withmostheavier,andmorepowerful,withashiftinmarketTABLE1:RegressionresultsforgasolineanddieselconversionbetweenNEDCandWTLCimprovementshavingoccurredintheearlierpartsegments(theSUVshareincreasedfrom38%toofthisperiod.Theseimprovementsweredrivenby46%)drivingfuelconsumptionupward.PowertrainNEDCtoWLTCratioICCT2014NEDCtoWLTCratioupdateRatiobetween2014andregulationsinmajorcarmarketsaimingtoreduceGasoline1.128EEAdata2019-22updatedfactorfuelconsumptionandCO2emissions,setting•Ontheotherhand,thebeginningofgrowing1.05thepaceoftechnologydeploymentinawaythatmarketsharesofelectricvehicles(EVs),1.185alsoinfluencedothermarkets.Carmakerslargelysubstantiallyloweringsales-weightedaverage1.20deliveredtheseimprovementsthroughimprovedfuelconsumptionandtailpipeemissions.Diesel1.0291.235internalcombustionengine(ICE)andvehicletechnologies.TheseincludedturbochargersandElectricvehiclesalesincreasedfrom1.5%in2017toThevaluesreportedherearefortheratiobetweenNEDCandWLTCemissionsperformance(gCO2/km)forpassengercars.Theseratiosimprovedtransmissions,enginedownsizing,material4%in2020,onthebackofsupportivegovernmentweredeterminedalsoseparatelyforpassengervehiclesandlightcommercialvehiclesforallbasicpowertrain-fuelcombinationsintheEEAsubstitutionandlight-weightingtechnologies,anpoliciesandmarket-andtechnology-drivencostincreaseduseofdieselpowertrains(especiallyindeclines(IEA,2018;2019b;2020).dataset(gasoline,diesel,naturalgas,LPG,gasoline-electric,diesel-electric,e85).SincedirectCO2emissionsforbattery-electricandfuel-cellelectricvehiclesare0gCO2/km,ratiosforspecificenergyconsumptionareunaffectedforthesepowertrains.FullregressionresultsareprovidedintheAppendix.9TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION10FIGURE4:ChangesinLDVspecificfuelconsumptionanditsprincipaldriversFIGURE5:Specificenergyconsumptionplottedagainstvehiclemass,bypowertrain,fortopsellinglight-dutyvehiclesinEurope2005-20172017-20202020-202210Speciﬁcenergycomsumption(Lge/100km)-10%-5%0%5%10%SEC%SUV16%8%EV6%HVICESEC4FootprintWeight2-10%-5%0%5%10%-10%-5%0%5%10%Notes:SECstandsforspecificenergyconsumption,calculatedasthecompoundannualrateofincrease/decrease.0100012001400160018002000220024002600ICESECstandsforthespecificenergyconsumptionofICEvehicles,calculatedascompoundannualrateofchange.Footprintstandsforthe800averagevehiclefootprint,calculatedascompoundannualrateofchange.Weightstandsfortheaveragevehiclemass,calculatedascompoundannualrateofchange.%EVreferstothechangeinthemarketshareofelectricvehiclesovertheperiod.%HVreferstothechangeintheWEIGHT(KG)marketshareofhybridvehiclesovertheperiod.%SUVreferstothechangeinthemarketshareofSUVsovertheperiod.Greenindicatesacontributionthatdecreasesspecificenergyconsumption.Redindicatesacontributionthatincreasesspecificenergyconsumption.ICE-PetrolICE-DieselHybridPlug-inHybridBatteryElectricSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.Source:basedon2021EuropeanregistrationdatafromEEA,2023a;EEA,2023b.SpecificenergyconsumptionforPHEVswascalcuatedusingautilityfactorderivedfromtheall-electricrangereportedintheEEAdatabaseusingafunctionreflectiveofreal-worldusage(FraunhoferISI,2021),specificenergyconsumptionofelectricityfordrivingphasedinall-electricmodeandspecificfuelconsumptionforotherdrivingphases.Between2020and2022,theglobalaverageoftheconsumptionofnewvehicles.Thecasesofmoremotiveenergyperunitdistance.Forexample,fuelrequirementsbyroughly20%vs.ICEspecificenergyconsumptionofnewvehiclesalesEuropeancountriesandChinaareparticularlyalargeSUV(suchasaFordF150)poweredbyapowertrains,thankstotheuseofelectricdecreased8%.Thisequatesroughlytoa4.2%year-visible,astheyhaveundergonethefastestchange.gasolineengineconsumesaround11Lge/100kmpropulsionindrivingphaseswheretheICEon-yeardecrease,doublewhathasbeenobservedInChina,thechangewassopronouncedthatitnow(1kWh/km),whileamediumcar(suchasaVWisparticularlyinefficient,whichmorethaninanyyearpreviouslyovertheentireGFEIdatabasefitswellwithintheclusterofdevelopedcountriesGolf)consumes6.4Lge/100km(0.6kWh/km).offsetshigherenergydemand(torechargetheperiodthatstartedin2005(ascoveredbythisserieswithhighfuelprices,whilestillhavingarelativelyConversely,powertrainsthatmoreefficientlyconvertbatteries)indrivingconditionswithbetterICEofbenchmarkingreports).Thissuggeststhat,startinglowlevelforfueltaxation.inputenergyintomotionconsumelessenergytoenergyefficiency.in2020,trendsinspecificenergyconsumptionhavedrivethesamedistance.enteredanewperiod,heavilyinfluencedbytherise2.2.1TECHNICALDETERMINANTSOF•Batteryelectricvehicles(BEVs)convertaroundofEVmarketsharesacrossallmajorLDVmarkets.THEENERGYEFFICIENCYOFVEHICLESDifferencesinspecificenergyconsumptionacross75%oftheenergytheyreceiveintomotion.powertrainsreflectdifferencesinthecapacityofIndeed,ChinasawEVsalessharestarttogrowveryThespecificenergyconsumptionofvehiclesdifferentpowertrainstoconvertenergyintomotion•Plug-inhybridscombinethebenefitsofBEVsandrapidlyin2019.Europefollowedin2020.Since2022,dependsprimarilyontwophysicalcharacteristics:it(IEA,2021a).hybridsinawaythatdependsontheextenttoaremarkablegrowthisstartingtooccuralsoinNorthisproportionaltotheweightandsizeofthevehicle,whichtheyaredrivenincharge-depletingmodeAmerica.WithEVsalesaccountingfor15%oftheanditisinverselyproportionaltotheefficiencyof•Gasoline-poweredICEsconvertroughly20%-25%(inwhichcasetheirenergyefficiencyperformanceglobalmarketin2022,andlimitedchangesinthethepowertrain.oftheenergyavailableinthefuelintomotion.isclosetoaBEVs)orincharge-sustainingmodeenergyuseperkmofnewICEVs,theimpactofEVs(inwhichcasetheybehaveinawaythatissimilaronthespecificenergyconsumptionoflight-dutyFigure5showsresultsrelativetovehiclessoldin•Dieselpowertrainsaregenerallymoreenergytoaconventionalhybridvehicle).vehiclesisnowsignificant,evenattheglobalscale.2022intheEuropeanmarketandreflectsdifferencesefficientthangasolineICEswithsimilartakingplaceacrossbothweightandpowertrains.performance,requiringroughly15%to20%lessHybrids,plug-inhybrids,andbatteryelectricvehiclesThesurgeinEVmarketsharesthatoccurredenergythangasolineICEstoperformthesamealsorecover,withlimitedlosses,thekineticenergyofafter2020ispairedwithstrongerchangesintheWeight-relatedtrendsbypowertrainshowthatservice,despiteaweightpenalty.vehiclesduringbraking,withlargerenergyefficiencypatternsshowinFigure3,sincemarketswithhighheaviervehicles(whicharegenerallyalsolarger,andadvantagesvs.ICEsforheaviervehicles.FurtherincreasesinEVsalessharesarethosecharacterizedtendtobeSportUtilityVehicles,orSUVs)require•Hybridvehiclesconvertaround35%ofthevariabilitydependsondrivingspeedsandtheuseofbythemostrelevantdropsinthespecificfuelfuel’senergyintomotion,cuttingliquidauxiliaries(e.g.,airconditioning).911TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION122.2.2TAILPIPECO2EMISSIONSOFNEWfrom2005-2019,and4.6%between2019andAsshowninFigure5,hybridvehiclesofferenergyrespectively,in2019.Sincethen,hybridsaleshaveLIGHTDUTYVEHICLES2022–fasterthanthedeclineinspecificenergysavingsrelativetogasoline-fuelledvehicles.TheyfurtherincreasedinKorea,reachinga12%marketconsumption.Similarly,weobservethatallmarketsalsoofferreducedairpollutantemissionsrelativetosharein2022.From2019onwards,hybridshavealsoThetailpipecarbondioxideemissionsfromnewsaleswhereelectrificationhasadvancedCO2emissionsdiesel-fuelledvehicles.ThistechnologywaspioneeredmadeinroadsintheEuropeanmarket,mostlydrivenhaveevolvedinaverysimilarwaytothespecifichavedeclinedfasterthanspecificenergyconsumption.inJapan,wherehybridvehiclesaccountnowforaboutbyregulatorypressurestoreducefuelconsumptionenergyconsumption,asshowninFigure6.Thetwoone-quarterofsales.Worldwide,hybridsalessharesandreflectingincreasedmodelavailability.Hybridquantitiesareproportionalandcloselyrelated.2.3VEHICLESALESBYremainedconstantfrom2013to2019,accountingsalesincreasedinEuropefrom4%in2019to19%inPOWERTRAINforroughly3%ofallvehiclesenteringthemarket.2022.HybridsalsogrewinmarketrelevanceinNorthForvehiclespoweredbyfossilfuels,declinesinOverthisperiod,relativelylowoilpricesandlimitedAmerica,withsalessharesreaching5%in2022.tailpipeCO2emissionsaredirectlyproportionaltoFigure7summarizesthedynamicstheLDVmarketavailabilityofhybridmodelshavelimitedmarketDespiteagrowingtrend,hybridvehicleshavesmallthedeclinesinspecificenergyconsumption.Thekeyhasevolvedintermsofvehiclepowertrains.Itpenetration,mostlytoJapanandKorea,wherehybridmarketshareinChina,reflectingastrongpolicyfocusdifferenceintrendsbetweenthetwoparametersconsidersbothglobaldevelopments(acrossthesalessharesreached20%and6%ofthetotal,onBEVs.isdrivenbythepresenceofEVs,andinparticularwholeperiodanalysedhere)andspecificcases,ofBEVs:theirspecificenergyconsumptionisrepresentedbyselectedyearsandtargetedmarkets.FIGURE7:LDVsalessharesbypowertrain:globalandinselectedmarketsaround70%lowerthanthatofICEs,whiletheirCO2emissionsare100%lower,astheyemitnoCO2Until2019,95%ofallvehiclessoldgloballyweretailpipeemissions.poweredbytraditionalinternalcombustionenginepowertrains.AmajordriverforimprovementsinUntil2019,95%ofallvehiclessoldgloballywerefueleconomythrough2019wastheintroduction,poweredbytraditionalinternalcombustionenginegrowthandeventualdeclineofdieselpowertrainsinpowertrains.AmajordriverforimprovementsinfuelEuropeandIndia.Dieselenginesprovedtobeagoodeconomythrough2019wastheintroduction,growth,solutiontoreduceCO2emissions,butimprovementsandeventualdeclineofdieselpowertrainsinEuropecameattheexpenseofincreasedairpollutantandIndia.emissions.12Thediscoveryoftheseincreasedemissionsin2015hasmarkedthebeginningoftheThismeansthattheelectrificationtrendisstrongerdeclineforthispowertraininbothEuropeandIndia.thantheSUVsshift,whenlookingatthisparameter.In2022,dieselpowertrainsaccountedfor23%ofTherefore,unlikespecificenergyconsumption,CO2salesinEuropeand25%inIndia.emissionshavecontinuouslydeclinedatagloballevel.Thedeclinewas1.6%,onaverage,peryear,gC02/km100%Salesshare75%50%25%0%200520062007200820092010201120122013201420152016201720182019202020212022ChinaNorthAmericaEurope100%100%100%75%75%75%50%50%50%FIGURE6:TrendsinthetailpipeCO2emissionsofnewvehiclesinmajorcarmarkets25%25%25%2900%0%0%100%100%100%270201020192022201020192022201020192022JapanKoreaOtherCountries25023021075%75%75%19050%50%50%17025%25%25%1500%0%0%201020192022130201020192022201020192022110BatteryElectricPlug-inHybridHybridMildHybridICEPetrolICEDieselICEOther200520062007200820092010201120122013201420152016201720182019202020212022ChinaNorthAmericaEuropeJapanOtherCountriesWorldNotes:ICEstandsforinternalcombustionengine–Otherincludescompressednaturalgas(CNG)andliquefiedpetroleumgases(LPG)poweredvehicles.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.13TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION14PHEVsandBEVs,accountedforlimitedsharesatthecars,withhighergroundclearanceandheightandthatFigure8showsglobalLDVsalesbymarketsegment,globalleveluntil2016,atwhichpointsalessurpassedmayhaveinitiallybeendesignedtobeabletodriveoff-clearlyillustratingthatthemaindevelopmenttwomillionunits(IEA,2017).By2019,EVsreachedroad,includetheso-calledSportUtilityVehicles(SUVs)observedovertheperiodcoveredbythisanalysis2%ofglobalsales.Norwaywasanearlyadopter,withand,inspecificmarkets(mainlyinNorthAmerica)also(2019-2022)hasbeenanincreaseintheshareofshareswellaboveglobalaveragealreadybefore2019.pick-uptrucks.SUVsandacorrespondingdecreaseinthesalesofBy2019,EVsalesaccountedfor56%ofthemarketincars(especiallysmallandmediumcars).OntheglobalNorway,morethantentimesthe5%shareofChinaandForthepurposesofthisreport,thepassengercarscale,SUVssawtheirmarketsharerisefrom22%inthe3.5%sharefortheEuropeanmarketasawhole(IEA,marketisdividedintofivecategories:small,medium,2005toroughlyhalfoftheLDVmarket(including2020andthisassessment).EVsalessharesincreasedandlargeconventionalcarsandsmallandlargeSUVs.cars,SUVs,andLCVs)in2022.sharplyin2020inEurope,withOEMssellingmoreEffortsweremadetoharmonizesegmentdefinitionsEVstocomplywiththemorestringentCO2emissionacrossallvehiclemarkets.Inadditiontoanincreaseacrossallmajormarketsinstandards,astheyintegratedEV-specificincentivesthemarketshareofSUV,Figure8–whichincludesmechanisms.13InthatyearEuropewasthelargestEVAllelseheldequal,SUVstendtohaveahigherdetailsforthemainglobalautomotivemarkets–alsomarket.ItsEVsalessharetripledandreached10%(IEA,specificenergyconsumptionthancars,duetoalargershowssignificantdifferencesinmarketsegmentation2021bandthisassessment).In2021,thesametrendcross-sectionalarea(whichincreasesairdrag)andacrosscountries.occurredinChina,wheretheEVsalessharetripledoverlargerweight(whichincreasestheenergyneededforthepreviousyear,reaching15%(IEA,2022andthisacceleration,i.e.toovercomeinertia).LightcommercialFIGURE8:LDVsalesbysegment:globalandinselectedmarketsassessment).EVsalesacceleratedsignificantlyin2022vehicles(LCVs)areprimarilyintendedforthecarriagealsoinNorthAmericaandKorea,withEVsreaching7%ofgoods.Theytendtobelargerthancarsandhave100%and10%ofthemarket,respectively.Inotherdevelopingmorespaceforfreightthanforpassengers,buttheyalsoSalesShareandemergingeconomies,EVsalessharesarestillbelowsharemanyofthetechnologycharacteristics(especially75%2%.Despitethis,EVsaccountedfor14%ofallnewLDVintermsofpowertrains)ofcarsand,forthisreason,aresalesglobally.Ofthese,two-thirdsarepurebatteryoftensubjecttosimilarregulatoryrequirements.Table50%electricvehicleswhiletherestarePHEVs(IEA,2023b2showspopularvehiclesofthesecategoriesineachofandthisassessment).themaincarmarkets.25%2.4VEHICLESALESAllelseheldequal,SUVstendtohaveahigher0%BYSEGMENTspecificenergyconsumptionthancars,duetoalarger200520062007200820092010201120122013201420152016201720182019202020212022cross-sectionalarea(whichincreasesairdrag)andInternationalregulationsdefinepassengercarsaslargerweight(whichincreasestheenergyneededforChinaNorthAmericaEuropepower-drivenvehicleswithfourormorewheelsacceleration,i.e.toovercomeinertia).Lightcommercialdestinedprimarilyforthecarriageofpeople(UN,2005,vehicles(LCVs)areprimarilyintendedforthecarriage100%100%100%UN,2023).Thepassengercarmarketisdividedintoofgoods.Theytendtobelargerthancarsandhavedifferentsegments,basedonvehiclesizeandshape.morespaceforfreightthanforpassengers,buttheyalso75%75%75%Conventionalcarstypicallyincludesedans,hatchbacks,sharemanyofthetechnologycharacteristics(especiallyormultipurposevehicles.Largerformsofpassengerintermsofpowertrains)ofcarsand,forthisreason,areoftensubjecttosimilarregulatoryrequirements.Table2showspopularvehiclesofthesecategoriesineachofthemaincarmarkets.50%50%50%25%25%25%0%2017201920220%2017201920220%20192022100%Japan100%Korea2017IndiaTABLE2:Topsellingvehiclemodelsbysegmentinkeymarkets100%75%75%75%MarketSmallcarMediumcarLargecarSmallSUVLargeSUVLCV50%50%50%ChinaLiL9EuropeWulingHavalH6Foton25%25%25%UnitedStatesHongguangXian-glingM1VWLavidaToyotaCamryWVT-Roc0%0%0%MinievChevrolet201720192022201720192022201720192022EquinoxFiat500VWGolfAudiA4BMWX5RenaultTraficLargeSUVSmallSUVSmallCarMediumCarLargeCarLCVUnclassiﬁedShareSUVKiaRioToyotaCorollaTeslaModel3FordF-150FordTransitSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.15TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION16TheNorthAmericanvehiclemarketisalsocharacterizedTheKoreanmarkethasshownsimilarrecenttrendsdomesticmanufactureofsmallvehicles.Recentacrosssegments,noracrossgeographies.InChina,bythehighestshareofLargeSUVs,whichincludeinsegmentationasEurope,withtheexceptionofthemarketdevelopments,however,showanerosionofEVsaccountedforthree-quartersofsmallcarsalesvehiclesthatarelocallydefinedas“fullsizedSUVs”andrelativesharesofconventionalcars;largecarshavemarketsharesofsmallvehicles,infavouroflargecarsin2022(Figure10),withtheHongguangminiEV,“pickups,”andarenotcommoninotherpartsofthelargermarketsharesinKorea,andsharesofsmallandandsmallSUVs.asedanwithatopspeedofaround100km/hthatworld.SharesarehighinbothCanadaandtheUnitedmediumcarsaresmaller.soldfromaroundUSD6,500touptoUSD15,000,States(79%and75%in2022,respectively).AustraliaSpecificenergyconsumptionvariessignificantlybybeingthetop-sellingmodelbothin2021and2022(notrepresentedinFigure8)hasalsolargeSUVshares,Japanhassimilarmarketsegmentationcharacteristicsvehiclesegment:largeSUVsarethemostenergy(vanVyk,2023).Chineseautomakershavebeenwith76%.LargeSUVsaccountedforonequarterofalltoEurope,buttheshareofsmallcarsisevengreater,intensivetypeofvehicle,whilesmallcarsarethecompetingintenselyformarketshareinthesmallNorthAmericanvehiclesalesin2022.GrowthintheseandthatofSUVsevensmaller.EuropeandJapansharemostefficient(Figure9).SmallSUVsandlargecarselectriccarsegment,andhavebeenwillingtosustainsegmentshasremainedstrong,withtheoverallSUVahighrelianceonoilimports.Thesignificantresilienceareroughlyequivalentsincetheformertendtotightmargins;Wulingfurthercutthestartingpriceofmarketshareincreasingby9percentagepointsfromofsmallcarsalsopointstoastrongpeculiarityofthehavehigherweightandlargercross-sectionalarea,theHongguangminiEVtoaround4,300USDinMay2019to2022.Japanesemarket.14whilethelattertendtohavehigherpowerratings.2023(Reuters,2023).EVssoldinothersegmentsWhenlookingattrends,itbecomesclearthatnotareoftensoldatfarhigherpricepoints,eitherbyInChina,SUVsaccountedfor45%ofthemarketinIndiaalsohashighsharesofsmallcarsales,followingallsegmentshaveimprovedatthesamerate.IntheestablishedEVleaderssuchasBYDandTeslaorby2022,asharethatincreasedby4percentagepointsalong-standingtraditionofhighfueltaxesandperiod2010to2019,smallSUVshaveundergonenewmarketentrantssuchasNio,LiAuto,andXPeng,from2019.NearlyallSUVssoldfallinthesmallSUVthefastestefficiencyimprovements,asthissegmentwhohaveyettopostprofits(Leplâtre,2023).category,asisthecaseinmostotherglobalmarkets.transitionedandevolvedfromanichecomposedLargecarsalsoaccountforasignificantshareofthemostlyofsmaller4x4vehiclestotheworld’smostInEuropeandtheUnitedStates,theshareofelectricmarket(26%)in2022,upby3%since2019.Chinahaspopularsegment.Thespecificenergyconsumptionsalesinthesmallcarsegmentisfarlowerthaninwitnessed,overthepastdecades,notonlyasurgeinofsmallSUVsimprovedby3%peryear,whileallChina(Figure10).InEurope,largeSUVsarethemostvehicledemand,butalsoafasttransitionfromsmallerothersegmentsimprovedatratesbetween1%andheavilyelectrifiedsegment,withnearlyhalfofallsalesvehiclestolargerones,asthedisposableincomeofits2.5%peryear.Intheperiodbetween2019andbeingelectric,followedbythemuchlargersegmentcitizensrose.2022,thestrongestefficiencyimprovementshave–intermsofsalesvolumes–ofsmallSUVs;withbeenobservedinsmallcars,withspecificenergyEuropeanautomakersapparentlyseekingtoreplicateEurope’sshareofSUVsisthelowestamongthethreeconsumptiondecliningatastaggering4.3%perthepossibilitytolock-inhighermarginsbysellinglargestglobalmarkets,accountingfor41%ofallsales.yearinthecaseofsmallcars,drivenmostlybyrapidmoreSUVsevenintherapidlyelectrifyingmarket.However,SUVsalesinEuropehavealsoconsistentlyadoptionofelectriccars,inparticularinChina.NorthAmericaseesadifferentdynamic,whereEVsgrownsince2017.Conventionalcarsstillaccountforaremostlyfoundinsmallandlargecars(withTeslathemajorityofvehiclessold,howevertheshareofAsexplainedinSection2.3,electricpowertrainsleadinginthelargecarsegment).Acrossallthreemediumcarshasbeenshrinkingfast,whilesmallSUVsignificantlyreduceenergyconsumption.However,markets,themediumcarsegmenthasrelativelylowsalesincreased.theirmarketpenetrationisnotequallydistributedlevelsofEVpenetration.FIGURE9:GlobalspecificenergyconsumptionbyvehiclesegmentFIGURE10:Electricvehiclesalessharebyvehiclesegmentinkeyautomotivemarkets,2022161.5ChinaNorthAmericaEuropeSpeciﬁcenergycomsumptionLCV(Lge/100km)KWh/km141.3121.1LargeSUVSmallSUV100.9LargeCarMediumCar80.7SmallCar60.60%25%50%75%100%0%25%50%75%100%0%25%50%75%100%40.4ElectricVehiclesOtherVehicles200520062007200820092010201120122013201420152016201720182019202020212022SmallCarMediumCarLargeCarSmallSUVLargeSUVNote:Electricvehiclesincludeplug-inhybridandbatteryelectricvehicles.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.Source:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklines17TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION18FIGURE11:FootprintandweighttrendsacrossmajorLDVmarkets5.02000Footprint(m2)Weight(kg)4.5180016004.014003.512003.010002.5800200520072009201120132015201720192021200520072009201120132015201720192021USAChinaEuropeJapanIndiaWorldOtherCountriesSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.TABLE3:Averagevehiclecharacteristicsbysegment(left)andchangeinsalessharebysegment(right)WorldAverageAverageweightSpecificEnergyConsumptionMarketsharechangefootprintSmallcarkgLge/100kmkWh/km2010-20172017-2022Mediumcarm210504.90.46-9%-3%3.5135060.56-3%-8%LargeCar4.016606.50.60-3%-1%SmallSUV4.515206.60.6119%10%LargeSUV4.1214010.50.98-2%1%5.216707.60.7118%11%LCV4.4Source:thisassessment(detailsintheAnnex)basedonEEA,2023a;EEA,2023bandMarklinesdata.2.5VEHICLESIZEANDgreaterweight.17AsshowninTable3andFigureFIGURE12:Globalvehicleweight(left-handside)andfootprint(right-handside)trends,includingandexcludingEVsWEIGHT5,forICEVsthisshiftisalsoassociatedwithsystematicdifferencesinspecificfuelconsumption16004.50Twomajorglobaltrendsareaffectingtheaverageacrosssegments,pointingtoakeyroleoftheshiftWeight(kg)vehiclesize(bestrepresentedbytheattributeofinmarketsegmentationinlimitingenergyefficiencyFootprint(m2)4.25footprint)15andweight16aretheshiftofmarketimprovementsforLDVs.1500segmentstowardsSUVsandelectrification.Recentdevelopments,however,followingtheyear14004.00Bothweightandfootprinthavebeenontherise2020,alsosuggestthattheincreasingtrendforsince2010(Figure11),theyearthatalsomarksvehiclefootprinthassloweddown,andvehiclesize13003.75achangeinpaceinthetransitionacrossmarketevenexperiencedaslightdeclinein2022(Figuresegmentsglobally(Figure7).Theshiftfrom12).Vehicleweight,ontheotherhand,continuedto12003.50(especiallysmallandmedium)carstoSUVshasincrease.Amajordeterminantofthisdevelopment20102012201420162018202020222010201220142016201820202022beenakeydriveroflargeraveragefootprintandistheadoptionofEVs.ThereasonisthatEVstendtohavesimilardimensions(andfootprint)toICEVs,Allvehicles,excludingEVsAllvehiclesbutgreaterweight,largelyduetotheheavybatterythattheycarry(asfurtherdetailedinChapter3).Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.19TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION203ANALYSISOFTHEFIGURE13:GlobalyWeaorlryldrateofchangeinspecificenCerhgiynaconsumption,withafocEuusroonpteheimpactoftheSUVshiNft,o2r0th10A-2m0e2r2icaVEHICLEMARKETDEVELOPMENTSAND0.0%0.0%China0.0%Europe0.0%IMPLICATIONSFORNorthAmericaPOLICYACTIONWorld-01..00%%-01..00%%-01..00%%-01..00%%--21..00%%--21..00%%--21..00%%--21..00%%--23..00%%--23..00%%--23..00%%--23..00%%--43..00%%--43..00%%--43..00%%--43..00%%-4.0%-4.0%-4.0%-4.0%AllvehiclesICEvehiclesAllvehicles,excludingSUVsICEvehicles,excludingSUVsNote:ObservAedllrvaetehiisctlehesyearlyrateIoCfEimvperhoivcelmesentinSEC.WiAthloluvteEhVic,wleisth,eSxUcVlu:idsitnhgeSraUteVosfimprovementICthEatvwehoiuclldehsa,veexcbleuedniancghSieUveVdswithoutEV(BEVandPHEV)sales.WithoutSUV,withEVs:istheratethatwouldhavebeenachievedifLDVsegmentsharehadremainedthesameasitwasin2010.WithoutSUV,withoutEVs:istheratethatwouldhavebeenachievedwiththesameLDVsegmentsalesshareas2010andwithoutEVsales.Sources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.ThisChapterfocusesonthetwomajortrendsidentifiedatanaverageannualratethatis30%higherthanitFIGURE14:Rateofchangeinvehicleweight,withafocusontheimpactoftheSUVshift,2010-2022inChapter2:ashiftinmarketsegmentstowardsactuallydid.19ThegapislargerinChina(around50%)SUVsandarecentrapiddevelopmentofvehicleandnarrowerinEurope(around20%),asthefirstWorldChinaEuropeNorthAmericaelectrification.TheanalysisconsiderstheimpactoffocusedonEVswhiletheotherfocusedonimproved1.4%boththesedevelopmentsonenergyuseperkm,directtechnologiesforICEs(asdiscussedinSection3.3.).1.4%1.6&1.4%1.2%CO2emissions,roadsafety,andequity.Specificsections1.2%1.4%1.2%1.0%covertheimplicationsthattheEVtransitionhadontheGapsintermsofdirectemissionsofCO2areeven1.0%1.2%1.0%0.8%SUVshift,andmakesthecasethatthecombinedshifttolarger,asCO2emissionsarealmostdirectlyproportional0.8%1.0%0.8%0.6%SUVsandtheEVtransitionareleadingtoincreasedriskstofueluseforICEVs,20andEVsdonotemitCO2at0.6%0.8%0.6%0.4%ofaglobaldivide.Thelastsectionlaysoutreasonsthatthetailpipe.Gapsareslightlynarrowerwithlifecycle0.4%0.6%0.4%0.2%justifythepolicyinterventionselaboratedinChapter4.accountingofgreenhousegasemissions,as:0.2%0.4%0.2%0.0%0.0%0.2%0.0%-0.2%3.1IMPACTSOFTHE•Light-dutyEVshavesignificantlylowerlifecycle-0.2%0.0%-0.2%SHIFTTOWARDSSUVSemissions,overtheirlifetime,withrespecttoICEVs-0.2%ICEvehicles,excludingSUVs(Bieker,2021),butthelifecycleemissiongap,Thissectionoutlinesimpactsthattheshifttowardsespeciallyinplaceswithcarbon-intensivegridmixes,AllvehiclesICEvehiclesAllvehicles,excludingSUVsSUVshadonenergy,directCO2emissionsperisnotaswideastheenergyefficiencydifferential.km18andvehicleweight,alsoconsideringrelatedSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.implicationsforroadsafetyandequity.•ThevariationofspecificenergyconsumptionforEVsacrossvehiclesegmentsissmall(asshowninFigure5forthecaseofEuropefor2022,andasalsoshowninIEA,2019a,withdatafromdifferentgeographies).3.1.1ENERGYANDCO2EMISSIONS3.1.2VEHICLEWEIGHTthat,intheabsenceoftheSUVshift,vehicleweightcouldhavebeenstronger,inpercentageterms,inincreasescouldhavebeenmorethanhalvedrelativeEuropeandChinathanintheUnitedStates.TheyFigure13showshistoricalevolutionsinspecificFigure14illustratestrendsinvehicleweight,globallytotheincreasethatactuallyoccurred(whenexcludingalsoindicatethatweightincreaseshavebeenmoreenergyconsumptionforthemainautomotivemarketsandinthemainmarkets,excludingtheeffectoftheEVimpactsoftheEVtransition)between2010and2022.pronounced,overtime,outsideoftheUnitedStates,globally,comparingdevelopmentsincasesthattransition(discussedinSection3.3.2),butincludingevenifaverageLDVweightintheNorthAmericanincludeorexcludeashiftinmarketsegmentation,theimpactsoftheSUVshift.AsSUVsareheavierthanRegion-specificresultsshowninFigure14indicatethatmarketisstillwellaboveallothersinabsoluteterms(bytakingtheyear2010asthebaseline.Thedataindicatesmallandmediumcars(Table3),andasthemainnetsavingsinweight(andrelatedmaterialdemand)about15-20%).thatenergyuseperkmforICEvehicleswithouttheshiftsinmarketsegmentationconsistofadeclineinshifttowardsSUVs(andthesubsequentincreasesinsalesshareofsmallandmediumcarsandanincreasevehiclesize,weightandpower)couldhaveimprovedinsmallSUVsalesshares,thedatainFigure14indicate21TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION223.1.3ROADSAFETYrideheight)fromcars.IntheUnitedStates,thisTakingcentralestimates,forallregions,thegaparepossibleandarealsoconsistentwiththeincreasesdesignincompatibilityhasdecreasedfollowingabetweenamediumcarandasmallSUVpriceisinaveragevehicleageinreplacementmarketslikeTheshifttoSUVsalsohadimplicationsforroadtraffic2009voluntarycommitmentamongautomakersontheorderof10%to20%,and25%to60%theEUandNorthAmerica(EuropeanEnvironmentinjuries.Worldwide,roadtrafficinjuriesaretheleadingtostandardizetheheightofenergy-absorbingbetweenasmallcarandasmallSUV,withthelargestAgency,2023,forEuropeandParekhandCampau,causeofdeathforchildrenandyoungadultsaged5-29structuresacrossallvehicles.Nevertheless,weightgapindevelopedeconomieswithlowfueltaxes2022,fortheUnitedStates),22evendespiteincreasesyears,andthecostofroadtrafficcrashesisestimatedatdifferences,togetherwithsomedegreeofcontinuing(IEA,2019a).21Similargapsemergefromarecentofaverageincomelevels,whichprovidedhouseholdsaround3%ofGDPacrossmostcountries(WHO,2022).incompatibility,increasemortalityrisksfordriversofcomparisonbetweensmall/mediumcarsandsmallwithalargerbudgetforvehiclepurchases).Thecarsincrashesbetweenpick-upsorSUVsandcarsbySUVsfordifferentEuropeanbrandsandmodels,whichsignificantpricegapsshowninFigure15,combinedStudiesanalysingtheimpactofincreasesinvehiclearound25%(MonfortandNolan,2019).foundthatsmallSUVscarryapricepremiumof8%towithacontinuedexpansioninSUVsalesshares,weightandsizeonmotorist,passenger,andpedestrian30%withrespecttocomparablesmallandmediumarealsoconsistentwiththeincreasedprofitabilitysafetyshowthatcollisionswithlarger,heaviervehiclesEvidencealsoshowsthattheseverityofinjuriesandthecars(Krajinska,2023).registeredbytheautomotiveindustryafter2020,aremorelikelytoresultinmoresevereinjuriesriskofmortalityissubstantiallyhigherforpedestrianstakingplaceevenwithadeclineinsalesvolumes(includingbraindamage)ordeath,bothtodriversthatarehitbyminivans,pickups,andSUVs,duetoFigure16indicatesalsothatICEpowertraincosts(StrickerandCorrea,2023),andnotwithstandingaofsmallervehiclesandtocyclistsandpedestriansfactorssuchasgreaterimpactforce,higherfront-endmakeuplowersharesofthetotalvehiclepriceforcontextualeffectduetoincreasedinflation.(Ossianderatal.,2014;VandenBerghe,2021;Edwardsdesigns,andlargerdriverblindspots(Tyndall,2023,smallSUVswithrespecttosmallandmediumcars.andLeonard,2022,NuyttensandBenMessaoud,NuyttensandBenMessaoud,2023).IntheUnitedThissuggeststhatashiftinmarketsegmentationThisalsoresultedinrelevantaffordabilityandequity2023).SuchstudiesprimarilyfocusontheimpactsofStates,pedestrianshitbyapickuptruckareroughlytowardsSUVs,withoutmajorchangesinpowertrainchallenges,withinandacrosscountries.Since2019,largerandheaviercarsinNorthAmerica(andespecially70%morelikelytodiethanthosehitbyacar,andthosetechnology,isnotonlylikelytoleadtowardsaveragenewcarsalespriceshaverisenfasterthanintheUnitedStates–wherecarcrashesareamongthehitbyanSUVaretwiceaslikely(Tyndall,2023).Ifallincreasesinturnover,butalsotowardslargerprofitinflationinmostregions.Forexample,theaverageleadingcausesofdeath)andEurope.lighttrucks(minivans,pickuptrucksandSUVs)soldmargins,formanufacturers.SuchadevelopmentispriceofnewcarsintheUnitedStatesinearly2023from2000-2019hadbeencars,pedestriandeathsinconfirmedalsobyanalysespointingtolargermarginswas30%higherthanin2019(thiscomparespricesRecentanalysesconductedintheUnitedStatesfind2019couldhavebeenreducedby30%(Tyndall,2021).availableforlarger,premiumICEVs(Sussamsetal.,ofthesamecars,andhenceisnotaresultoftheshiftthatlargetrucks,minivansandSUVsdonotnecessarily2018;Slowiketal.,2022).ThisisalsoconsistenttoSUVs)(BureauofLaborStatistics,2023).Newmaketheroadsmoredangerous,inaggregatedterms,3.1.4EQUITYwithreportsshowingincreasesinOEMprofits,evencarbuyerstendtobehigher-incomehouseholdsfordriversorpassengers.However,risksaredistributedwithdecliningsales(WelchandNaughton,2023and(Krisher,2022)thatcanaffordlargerandmoreunevenly.IncreasedinjuryandmortalityratesforTheanalysisdevelopedbytheIEAandtheICCTin2017Hersh,2023).expensivevehicles.However,thechoicesmadebyoccupantsofsmallervehiclesaregenerallyoffsetby(assummarizedinFigure15)showsthatvehiclepricesthissegmentofthepopulationaffectthechoiceslowerratesforoccupantsoflargervehicles(Ossiandertendtobehigher,acrossallmainautomotivemarkets,Combiningtheseestimateswiththedecade-longandaffordabilityofcarsalesforthesecond-handetal.,2014).forsmallSUVs–thesegmentthatkeepsexperiencingtendencyofaglobalshifttowardsSUVsshowsclearlymarket(see,forinstance,Krisher,2022).23Thelower-significantincreasesinmarketshares–thanforthattheresultingimpactledtosignificantincreasesincomesegmentofthepopulationthatreliesontheInadditiontotheirgreaterweightandsize,pickupsmallandmediumcars–thesegmentsthat,globally,inOEMrevenueswithrespecttoacounterfactualsecond-handmarketisalsolikelytobeaffectedbytheandSUVdesignsdivergesomewhatacrosskeyexperiencedthemostrelevantcontractions.withouttheshift.Drawbacksrelatedtopotentialrecentaveragepriceincreaseofvehicles,whichwasparametersthatinfluencecrashsafety(forinstancemarketgrowthhigherthanwhathasbeenobservedcompoundedbyashifttowardsSUVs.FIGURE15:Evolutionofvehicleprices,bysegmentandeconomiccluster,fortheyear2017FIGURE16:Shareofpowertraincostsininternalcombustionenginevehiclepricefordifferentvehiclesegments1508040%Powertrain7035%OthervehiclecomponentsPrice(thousandUSD)1206030%PowertraincostasVehiclePrice(thousandUSD)5025%percentageofvehiclepricePercentageofpowertraincost904020%intotalvehicleprice3015%60Developedeconomieswith2010%comparativelylowfuelprices/taxes105%300%Developedeconomieswith00comparativelyhighfuelprices/taxesSmallSmallCarCarEmergingeconomiesMediumSmallLargeLargeVan/MediumSmallLargeLargeVan/CarSUVCarSUVLCVCarSUVCarSUVLCVSegmentSource:adaptedfromIEA,2019a,withrevisionoflabelsusedforvehiclesegmentstomatchnamesusedinthisreport.Source:adaptedfromITF,2020a,withrevisionoflabelsusedforvehiclesegmentstomatchnamesusedinthisreport.23TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION24Thiseffectisstrongerinhigh-incomecountries,commonpathtoaccessmotorization.Therefore,FIGURE17:PowertrainsharesgloballyandinmajorEVmarketsglobally,withEVssingledout,2019and2022wherethereisahighershareofSUVsales.However,ahigheraveragepriceofimportsdrivenbyandatashowsthatthemovetowardslargermarketincreasedavailabilityoflargercarsexportscanleadWorldsegmentsisaglobalphenomenon.Dataonvehicletogreaterchallengesingainingaccesstomotorizedpricesbysegmentandglobalregion,availablefrommobilityincountriesstronglyreliantonsecond-100%IEA,2019a(andshowninFigure15)showaclearhandvehicleimports.Duetogreaterconstraintsin75%pricegapbetweencars(especiallysmallandmediumtherangeofmobilitychoices,equityimpactsdue50%cars)andsmallSUVs.Assalessharesofsmallandtovehiclepriceincreasesarealsomorerelevantin25%mediumcarsshrinkandsharesofsmallSUVsrise,countrieswithlimitedaffordable,accessible,and0%equityimpactsarealsolikelytoemerge.reliablealternativestopersonalvehicles(suchaspublictransport).2019202220192022Thedynamicsofsegmentshiftsinlow-andmedium-incomecountriesarethecombinationofdifferent3.2THEROLEOFAlllightdutyvehiclesElectricvehiclesfactorsthatvarycountrybycountry:EVSINTHESHIFTTOWARDSSUVSChinaUSAEurope•Newcarbuyersinlow-incomecountriestendtorepresentasmallandveryhigh-incomesegmentFigure17providesadditionalinsightsacrossthe100%100%100%ofthepopulation,thereforetheirhighbudgetmainglobalmarketscomparedtotheinformation75%75%75%availabilityandpreferencesleadthemtopurchasealreadyshowninFigure10.24Thefigureillustrates50%50%50%increasinglylargevehicles.Insuchcountries,theevolutionofmarketsegmentationacrossall25%25%25%lowerincomesegmentsofthepopulationdonotpowertrains(left-handbars)andforEVs(right-hand0%0%0%havethefinancialabilitytoenterthenewcarbars),between2019and2022.Thefigureshowsmarket,thereforethedemandforsmaller,morethatEVsarenotexemptfromtheshifttowardsSUVs:201920222019202220192022201920222019202220192022affordablenewcarsisweak.themarketshareofelectricSUVs(especiallysmallelectricSUVs)hasgrownsubstantiallybetween2019AlllightdutyElectricAlllightdutyElectricAlllightdutyElectric•Inmedium-incomecountries,wherevehicleand2022,inallmarkets.Thismarksanincreaseinvehiclesvehiclesvehiclesvehiclesvehiclesvehiclesownershipisontheriseanddemandgrowthproductdiversification,asEVsalsogainedoverallisstrong,smallandmediumcarsareretainingmarketshares,movingbeyondearliermarketLargeSUVSmallSUVSmallCarMediumCarmarketshareasfirst-timenewcarbuyersinthesedeploymentstrategies,morefocusedonlarge,LargeCarLCVUnclassiﬁedcountriesaremorelikelytobeabletoaffordpremiumcarmodels.smallervehicles.TherapidgrowthdynamicsSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.alsomeanthatOEMscanretainsufficientprofitEVsharesdeclinedinthesmallcarsegmentbetweenmargins.BothjustifylowerSUVmarketshares,in2019and2022,acrossallmarkets.ThisisprimarilyduetoshiftsinEuropeandtheUnitedStates3.3.1ENERGYANDCO2EMISSIONScomparisonwithhigh-inciomecountries.(wherethiswasfurtherexacerbated,in2023,bydiscontinuationoftheonlyelectricsmallcarbyaUSChapter2highlightsthekeyroleEVshaveplayedinEquityimpactsduetoincreasesinnewvehiclepricesOEM).AsshownalsoinFigure6,EVsinthesmallreducingthespecificenergyconsumptionofvehiclesindevelopedcountriesmayalsoimpactsecond-handcarsegmentmaintainedsignificantmarketsharesinafter2020.Section3.1.1discussesimpactsoftheshiftvehiclessalesinlow-andmedium-incomecountries,China.Globally,EVsalsohavelimitedmarketsharetowardsSUVsonenergyefficiencyandCO2emissionwheresecond-handvehiclepurchasesareamorewithinthelargeSUVsegment.Thisisconsistentwithtrends,excludingtheeffectofelectrification,pointingsizablemarketsharesoflargeSUVslimitedtoNorthoutthattheSUVshiftledtosignificantreductionsinAmerica,whereEVsalsohad–todate–lowermarkettherateofimprovementofenergyefficiencycomparedpenetration,incomparisonwithChinaandEuropetowhatcouldhavematerializedwithoutthisshift,and(despiterecentincreases).resultinginupwardpressureonenergydemandandCO2emissions.3.3IMPACTSOFTHEEVTRANSITIONThissectionanalysesthespecificeffectofincreasedEVdeploymentonthegapinenergyuseperkmSimilartothecaseoftheSUVshiftcoveredin(outlinedinSection3.1.1),consideringtheimpactsSection3.1,thissectionassessesimpactsontheEVonspecificenergyconsumptionoftheshifttoSUVstransitiononenergyandCO2emissions,weightandinEVs.LikeFigure14,Figure18showshistoricalmaterialneeds,roadsafety,andequityindifferentevolutionsinspecificenergyconsumptionforthemainsub-sections.25automotivemarketsglobally,comparingdevelopmentsthatactuallyoccurredwithacounterfactualthatexcludestheshiftinmarketsegmentation(onthetopoftheresultsalreadyincludedinFigure14).25TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION26FIGURE18:Globalyearlyrateofchangeinspecificenergyconsumption,withafocusontheimpactoftheEVtransition,2010-2022FIGURE19:WeightasafunctionofelectricrangeforbatteryelectricvehiclesWorldChina0.0%EuropeNorthAmerica300030000.0%Weight(kg)0.0%0.0%Weight(kg)2500250020002000-1.0%-1.0%-1.0%-1.0%-2.0%-2.0%-2.0%-2.0%1500AverageICE1500AverageICE1000vehicleweight1000vehicleweight5005000-3.0%-3.0%-3.0%-3.0%3006009000300600900NCAElectricRange(km)ElectricRange(km)SmallCarMediumCarLargeCarSmallSUVLargeSUVBatteryChemistry:NMCLFP-4.0%-4.0%-4.0%-4.0%Source:analysisbasedondatafromEVVolumes(EVVolumes,2023).AllvehiclesICEvehiclesAllvehicles,excludingSUVsICEvehicles,excludingSUVsSources:thisassessment(detailsintheAnnex)basedonIEA,2019a;IEA,2021a;EEA,2023a;EEA,2023bandMarklinesdata.Overall,resultsshowninFigure18pointtowardthreefactors:specificenergyconsumption,batteryTheelectricrangeofavehicleisdeterminedbybatteryTherelevanceofrangeasakeydeterminantofnetincreasesinenergysavingsfromEVs,acrossalltechnology,andrange.capacityandweight(Figure19),aswellasbythevehiclebatterysizeisalsoimportantconsideringPHEVsmarkets.WithoutEVs,savingswouldhavebeen40%aerodynamicsandpowertrainefficiency.AllelsebeingandBEVsindependently,sincePHEVsaremeantloweratthegloballevel.DespitelowerimpactsonEVs,duetothepossibilityequal,rangeisdirectlyproportionaltobatterycapacity,torelyonall-electricrangesmainlyfortripswithtorecoverenergyinregenerativebraking,specificandthusalsovehicleweight.Figure19showsthat,onshorterdistances–andthereforehavesmallerbatteryTheroleofEVsistheresultoftwoeffects.Ononehand,energyconsumptionforEVsstillvariesacrossmarketaverage,adding100kmofrangeadds330kgtovehiclepacks(Figure20)–whiletheystillrelyontheHEVEVshavemarkedlylowerspecificenergyconsumptionsegments.Europeandata(Figure5)showthatsmallweightforaBEV(lessadditionalweightisneededforpowertrainincharge-sustainingmodeforlongerversuscompetingtechnologies(seealsoFigure5,BEVsconsumelessenergy,onaverage(14-15Wh/smallerBEVs,giventheirlowerenergyintensity).EVsdistances.26Assuch,theycomewiththeadvantageshowingthisclearlyforthecaseoftheEuropeanmarket).km),thanlargeall-electricSUVs(18-20Wh/km).withrangesbelow400kmhaveaweightthatisroughlyoflowerrequirementsintermsofbatterymaterials,Ontheotherhand,likeallvehicles,specificenergySmallEVsalsohavelowervehicleweightsthanlargesimilartoaverageICEvehicles,whileforlongerrangewithrespecttoBEVs,andthedisadvantageofhavingconsumptionforEVsalsoincreaseswithincreasingEVs,astheyneedsmallerbatteriesforthesamerangevehicles,weightrapidlyincreases.aweightpenaltyduetotheICE.27vehicleweight(andthereforealsowiththesegmentshift(Figure19).MotortechnologycanalsocontributetotowardsSUVs),eventhoughtheseincreasesarelessweightsavings,sincehigherefficiencymotors(usuallyFIGURE20:AveragebatterycapacityforPHEVsandBEVsgloballyandinthemainLDVmarketspronouncedthanforotherpowertrains.usingrare-earthrichpermanentmagnets)candeliverbetterspecificenergyconsumption.100EnergysavingsduetoEVsarestrongerinrecentyearsandinmarketsthatsawalargerEVmarketBatterytechnology(includingchemistryandpackAverageBatteryCapacity80penetration.InChinaandEurope,electrificationhadarchitecture)mattersforvehicleweightbecauseit(KWh/vehicle)averystrongroleinthedecreaseofaveragespecificdeterminestheenergydensityofthebattery(Wh/kg).60energyconsumptionofnewvehicles.IntheUnitedBettertechnologiesdelivermoreenergyperunitweightStates,impactsoftheEVtransitionontrendsofspecificandtendtobeusedmorefrequentlyonlargervehicles,40energyconsumptionarelesspronounced,duetolowerwithlongerranges(Figure19).HighnickelcontentEVmarketsharesascomparedtoChinaandEurope.chemistriestendtohavehighercell-levelenergy20From2020to2022,electrificationledtoreductionsindensitiesthatrangefrom240to340Wh/kg,whilespecificenergyconsumptionthatwereroughlyoffsetbylithiumironphosphate(LFP)chemistriesrange02013201420152016201720182019202020212022thedetrimentalimpactofSUVs.between150and190Wh/kg(Hasselwanderetal.,2012China2023,BatteryDesign,2022,Frithetal.,2023).PackBEV3.3.2VEHICLEWEIGHTtechnologyisalsoveryimportant,astherecanbeWorldNorthEuropePHEVsignificantdifferencesacrosschemistries,withLFPAmericaEVsareonaverage13%heavierthanequivalentICEs.performingbetterthanotherchemistries,asalsoshownThedifferentialinweightforEVscomesprimarilyfrombyBYD,withthebladebattery(Frithetal.,2023).ThisSource:thisassessment(detailsintheAnnex)basedonEVVolumes(EVVolumes,2023).theweightofthebattery,whichinturndependsonopensupopportunitiesforitsuseonvehicleswithlargerbatteriesandlongerranges.27TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION28BOX2:FIGURE21:Rateofchangeinvehicleweight,withafocusontheimpactoftheEVtransition,2010-2022REDUCINGCRITICALMATERIALWorldChinaEuropeNorthAmericaREQUIREMENTSFOREVBATTERIESBY1.4%REDUCINGBATTERYSIZES1.4%1.4%1.4%1.2%1.2%1.2%1.2%1.0%EVbatterycathodesrequirehighpurity“criticaltargets,hasalreadybeguntoguideinvestmentfor1.0%1.0%1.0%0.8%materials”includinglithium,cobalt,manganese,andnewfacilities,aswellasdevelopmentofinnovative0.8%0.8%0.8%0.6%nickel.MagnetsthatareinmostEVmotors(exceptchemistriessuchassodium-ionbatteriesforvehicle0.6%0.6%0.6%0.4%forACinductionmotors)requirerareearthelementsapplications(Tapia-Ruizetal.,2021).Thesearebeing0.4%0.4%0.4%0.2%(mainlyneodymium,andoftenalsodysprosium,exploredbyseveralChinesebatterymakers,andare0.2%0.2%0.2%0.0%terbium,andpraseodymium).mostviableinsmallEVs(aswellasinelectrictwo-0.0%0.0%0.0%-0.2%wheelersduetolowerenergydensityandlowercost).-0.2%-0.2%-0.2%Amassivescale-upofcriticalmaterialmining,ICEvehicles,excludingSUVsprocessing,andEVcellproductionwillberequiredForagivenbatterychemistry,mineralintensityAllvehiclesICEvehiclesAllvehicles,excludingSUVsoverthecomingdecadetoenabletherapidgrowthscaleslinearlytobatterycapacityatthecelllevel.ForofEVsrequiredtomeetglobalclimatetargets(IEA,example,0.1kgoflithiumareneededpereachkWhofSource:thisassessment(detailsintheAnnex)basedonEEA,2023a;EEA,2023bandMarklinesdata.2023c).ScalinguptolevelswheresupplycanmatchcapacityforNCAandNMC811cellchemistries(thedemandgrowthwillrequireclosinggapsbetweenintensitiesaresimilarforLMO,at0.106kg/kWh,andFigure21showsweighttrends,globallyandinthethatincreasesby12%forevery500kgdifferenceglobalsupply(basedonexpansionannouncements)forLFP,at0.095kg/kWh).mainlight-dutyvehiclemarkets,consideringboththebetweenvehicles(Shafferetal,2021).ThisisalsoandEVbatterydemand,aswellasensuringthateachSUVshiftandtheEVtransition,similartoFigure18forwhatexplainsincreasedinjuryandmortalityratesstepoftheEVbatterysupplychain—mines,materialDemand-sideopportunitiesforright-sizingbatteriesspecificfuelconsumption.Theindicationsemergingforoccupantsofsmallervehiclesincrasheswithprocessing,cathodeandanodeproductionandcellcouldalsohelptoclosethematerialsupplygap,asfromFigure21areconsistentwiththeconsiderationslargervehicles,asflaggedinSection3.1.3andproduction—rampsuptofullcapacityatspeedswellasdecreaserisksposedbyregionalconcentrationoutlinedinChapter2andabove,sincetheyindicateasalsoreportedinNuyttensandBenMessaoudequivalenttoorbetterthanwhathasbeenachievedoflithium(andothermetal)miningandprocessing.thattheEVtransitionledtonetincreasesinweight(2023)forthecaseofBelgianroads.todate.ThesupplygapforlithiumisparticularlyForinstance,returningtoaveragebatterycapacitiesoftrends,addingtotheeffectoftheshiftfromsmallandacute–IEAassessedthegapbetweenEVbatteryaround40kWh/vehicle(theglobalaveragein2017),mediumcarstoSUVs.A2018studybytheInsuranceInstituteforHighwayrequirementsintheNetZeroScenarioandannouncedratherthan60kWh/vehicle(theaveragein2022–asSafety,focusedontheUnitedStates,foundthatproductionplansto2030tobejustunder40%forshowninFigure20),wouldreducelithiumdemandbyTheeffectisremarkableinthecaseofEurope,hybridvehiclesweresubjecttoa10%higherlithiumminingandprocessing(IEA,2023c).aroundone-third.Otherdemand-sidemeasures,suchcharacterizedbyrapidgrowthbothinEVshareslikelihoodtoinjureapedestrianthanICEequivalentsreducingrelianceoncarownership,togetherwithEVandbyhigherEVpenetrationintheSUVsegments.(HighwayLossDataInstitute,2018).ExtrapolatingRapidaccelerationinEVdemand,bolsteredbybatteryrecycling,couldfurtherreduceexposuretoChinaexhibitsalowerweightincreaseduetoitsEVthisresultonthebasisofcharacteristicslikeambitiousEVdeploymentandindustrialpoliciesandcriticalmineralrisks(Riofrancosetal.,2023).transition,reflectingthefactthatthemajorityofEVfasteraccelerationandlowernoise,Zipper(2023)salesareinthesmallsegment(Figure10).InthecaseclaimsthatsimilarimpactscouldalsoendupofNorthAmerica,impactsoftheEVtransitionarebeingobservableforEVs.LowernoiseiseffectivelylargerwhentheSUVsegmentshiftisnottakenintoidentifiedasareasonablecauseofhigherfrequencyconsideration,sinceEVshavemostlypenetratedinofcrashesbetweenEVsandpedestrians,inthecasesmallandlargecarsegmentstodate.ofNorway(NuyttensandBenMessaoud,2023).3.3.3ROADSAFETYWhileacknowledgingthatmostcountriesarestillinanearlyphaseofEVdeployment,analysesChapter2–inparticularSection2.5–showsthatthathavereviewedavailableevidencefromroadvehicleelectrificationishavingasignificanteffectssafetyanalysesregardingEVsinEurope(includingonvehicleweight,contributingtothecontinuationNorway)donotpointtowardsindicatorsofofanupwardtrend,despiteaflatteningofthenegativeimpactsfromvehicleelectrificationonevolutionofvehiclefootprints.Thiscontributionroadcrasheswithothervehicles(NuyttensandBenmeansthatEVsareclearlynotexemptfromMessaoud,2023).Apossiblereasonforthisistheimplicationsrelatedtoroadsafety.AvailabledatapossibilitythatEVsaremorefrequentlyequippedonroadsafetypointtoalikelihoodofpassengerswitheffectivedriverassistancefeatures,capableofbeingkilledinacollisionwithanothervehicleprotectingbothoccupantsofthevehicleandotherroadusers.29TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION30Overall,itisthereforeimportantthatatransitionoilproductmarketprice–arebenefittingthose•GrowinginterestinbatteriesforstationaryTheanalysisdevelopedinChapter3consideredkeytowardsgreatersharesofEVscaneffectivelyconsumersandsmallbusinessesthatcanaffordtheapplications,aswellasregulatoryrequirementselementsthatunderpinnedanincreaseinmarketsharesintegratestrategiesthatlimitstheirimpactonweighthigherupfrontcost.Thesetendtobeinveryhigh-relatedwithmaterialscircularityandaprogressiveofSUVs.Itlookedattheimpactofthisdevelopmentincreases(Shafferetal,2021),whilestilldeliveringincomesegmentsofthepopulation,meaningthattransitiontowardsnet-zeroemissions,insofarasonenergyconsumption,CO2emissionsroadsafetythesizableenergysecurity,energydiversification,lowerincomesegmentsofthepopulationarenotthesepoliciesexertupwardpressureonthevalueandequity.ItoverlaidtheseconsiderationswithandGHGemissionmitigationbenefitsthatEVsareabletoreaptheeconomicbenefitsofelectrification.ofEVbatteriesandthematerialstheycontain,astransformationsduetoincreasedratesofelectrificationcapableof.Therefore,vehicleelectrificationisnotexemptfromthesecouldalsoslowdownEVdepreciation,withintheglobalLDVmarket,pointingoutcaseswhereEVsequitychallenges,atleastuntilsuchatimewhenEVsnetadvantagesforpeopleandbusinesseshavingcouldmitigateorexacerbatechallengesarisingfromthe3.3.4EQUITYnolongercomewithhigherupfrontcosts.easieraccesstocapitalatlowercosts.31SUVshift.Availabledataonvehiclepurchaseprices–suchasEVsalesareconcentratedinChinaandhigh-incomeTheimpactsofdynamicsaffectingvehiclepricesOverall,thisanalysisflaggedthefollowingkeyissues,thoseoutlinedinIEA,2019aandinfollowingtechno-countries,ashigherupfrontcosts(especiallyin(viadepreciationand/orstructuraldeterminantsofalsosummarizedgraphicallyinTable4:economicanalyses,includingSlowik,2022,forthecountriesotherthanChina)andlackofchargingbatterycosts)arenotonlylimitedtosinglecountriesUnitedStates28–pointtoasignificantpurchasepriceinfrastructuremakeEVdeploymentslowinlow-andormarkets,buttheyalsohavetransnational•WhiletheshifttowardsSUVsintheLDVmarketcouldpremiumstillcharacterizingsalesofbothPHEVsandmiddle-incomecountries.Thesameequityissuethatrelevance,throughinternationaltradeofnewandbeimportanttosupportlonger-terminvestmentsBEVs.Thispremiumisgroundedinacombinationofexistswithinindividualeconomies–aslow-incomesecond-handvehicles.Thelatterisespeciallyforstakeholdersintheautomotivesector,especiallytechnicalandeconomicfactors,including:groupsarenotyetabletoreapthesavingsthatcomeimportantformanylow-andmedium-incomeincaseswheretheneedtoinvestinelectrificationwithmoreefficientelectricvehicles–alsoexistsatcountriesinAfrica,Asia,theMiddleEastandhasnotbeenproperlyanticipated(orithasbeen•Thecostofthebatteries,forBEVs,whichthegloballevel,acrosscountrieswithdifferentlevelsLatinAmerica,astheyreceivesignificantflowsofdeliberatelydelayed)33,itiseffectivelyreducingthecurrentlystillexceedsthecostofICEofincome.usedcarsandvans(contributingtoensureamoreofferofaffordablevehiclesonthemarket.powertrains,andmajorefforts(includingtheaffordableaccesstoenhancedmobilityoptions)32possibilitytodevelopnewjointventuresbetween3.4ARESUVSANDEVSfromhigh-incomecountries(UNEP,2021).•TheshifttowardsSUVshasthereforedetrimentallybatterymanufacturersandautomotiveOEMs)INCREASINGTHERISKimpactedequity,withstrongernegativeneededtodevelopnewsupplychains.OFAGLOBALDIVIDE?IntheabsenceofstrongeffortstoacceleratetheshiftconsequencesonpartofthesocietysubjecttotoelectricmobilityintheGlobalSouth,ataffordablegreaterbarrierstoaccesscapital,bothdomestically•InthecaseofPHEVs,thecostofcomplexEquity-relatedchallengesandgreaterexposurecosts,thereisanincreasedriskofagrowingdivideandinternationally.Duetoitsupwardpressureinpowertrains,whichcombineICEswithsystemsoflow-incomehouseholdsandbusinessestothebetweenvehiclemarketsintheGlobalNorth–morenewvehicleprices,anddespiteincreasesinaveragemeanttopairengineswithelectricmotorsandcombinedmarkettransformationtowardsEVsandfocusedonnewEVpurchasesandhavinggreaterincomethattookplaceovertheyearsacrossbatteries,anywaylargerthanonhybridsandICEVs.SUVspointtowardsthepossibilityofagrowingcapitalavailabilitytoretainsecond-handEVs,anddifferentgeographies,thisshiftmayalsohaveglobaldivide,notonlywithindifferentpopulationothermarkets–moreexposedtoEVdeploymentandcontributedtoastagnationoftheglobalmarketfor•Othercostcomponents,relatedtoresearch,groupswithincountries,butalsobetweenmajorincreasedflowsofcheapandunsafeICEvehicles,newvehicles.developmentand–aboveall–investmentindevelopedeconomiesandothercountries.includingthroughsecond-handvehicletrade.newindustrialfacilities,asthesecomewithlarge•TheSUVshifthasclearnegativeimplicationsforcapitaloutlaysthatneedtoberecoveredovertime.AnumberofglobaldynamicsmayexacerbatethisRapiddeclinesinnewbatterycostsand/orenergyenergyefficiencyimprovementsandCO2emissionpotentialtrend:prices(withgreaterenvironmentalbenefitsifthesemitigation,asitledtosizablereductioninenergy•EspeciallyforlegacyOEMs,costspotentiallydeclinesarefasterforrenewableenergiesand/orefficiencyimprovementincomparisonwithaassociated(asthisvariesonacase-by-case•Increasesinfossilenergyprices,alreadyotherformsoflow-carbonelectricity,incomparisoncounterfactualwithoutthisshift.basis)withtheneedforearlydismissalofacceleratingthetransitiontoEVs,astheytendwithfossilfuels)couldmitigatetheseeffects.existingindustrialfacilities,orpartofthem(e.g.,tobepairedwithgreaterexposuretohigh•TheSUVshiftisalsoclearlypairedwithengineproductionlines),evenifothercapitalenergypricesonnon-EVdrivers.29resultingin3.5NEEDFORPOLICYincreasedvehicleweightanddemandforcostsarelikelytobealreadyamortized(contrarygreaterchallengestoaccessEVsforhouseholdsACTIONTOADDRESSmaterials,beyondwhatcanbecomeavailabletothecaseofnewmarketentrantsfocusingandbusinessesexposedtohighercostsofEXISTINGCHALLENGESfromend-of-lifemanagementofvehicles,34evenexclusivelyonelectricvehicles).borrowing,andoftenreliantonsecond-handinreplacementmarkets.vehiclepurchases.Chapter2describedkeyfeaturesofrecentThesefactors,combinedwithanear-termfocusdevelopmentsofthelightdutyvehiclemarket,providingonhigherprofitability,alsoexplainthegreater•FasterdepreciationofICEVs,includingSUVsaglobaloverviewthatcoversvehiclesalestrends,reluctanceoflegacyOEMstoentertheEVmarket,(whicharestilllikelytoremainmoreexpensivepowertraintechnologies,marketsegments,specificespeciallyinsmallersegments.Thisisthecasethanconventionalcars),withrespecttoEVs,30energyconsumption,CO2emissions,vehicleweightdespiteexposuretolong-termlossesofmarketresultingingreaterchallengestoaccessEVsforandfootprint.Chapter3analysedfurtherspecificsharestoChinesecompetitors(alreadysellingEVshouseholdsandbusinessesexposedtohigherimplicationsoftwomajortrendsidentifiedinChapter2:ataffordableprices,andacrossseveraldifferentcostsofborrowing,andoftenreliantonsecond-ashiftinmarketsegmentstowardsSUVsandarecentsegments)andprospectsforshrinkingrelevanceashandvehiclepurchases.rapiddevelopmentofvehicleelectrification.automotivetechnologyprovidersgoingforward.TheeconomicbenefitsofEVs–whichconsistoflowerrunningcostsandadecreasedexposureto31TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION32•IncreasedmarketsharesofSUVsarealsoContrarytotheSUVshift,though,theEVtransitionPolicyisalsocrucialtohandlechallengesrelatedFurtheropportunitiescanalsoariseforotherpairedwithnegativeimplicationsforroadenablesaccesstomuchloweroperationalcosts,andwithtensionsregardingmaterialdemandandemergingeconomies,astheycouldkickstartand/safety,includingforthemostvulnerableusers,lowertotalcostofownership,especiallyforhighlysupply.Inadditiontoscalingupsupplyandinvestingorstrengthennascentmanufacturingindustries,exacerbatingequityimpacts.utilizedvehicles.Thishaspositiveimplicationsforinalternativebatterychemistries,demand-sideespeciallyiftheyaresupportedinthiseffortbyequity,aslongashurdlesinovercominghighermeasurescanplayanimportantrole(Riofrancosetal.,developmentorcleanfinance.Theseopportunities•Thenetbenefitsforenergyefficiencyupfrontcostsareaddressedbypolicy.2023).ThesearenotlimitedtoaspectsrelatedwitharenotlimitedtoLDVs,butincludeproductimprovementsandCO2emissionmitigationthetypeofmaterialsneededinEVbatteries,buttheydiversification,e.g.,withtwo-wheelers,andfromEVs.Effectivelyaddressingthesekeyissues,whilealsocovertheeffectsassociatedwiththeevolutionofimproved/strengthenedinformaland/orstructuredpursuingimprovementsacrossallindicatorsvehicleandbatterysizes.Importantly,policymeasurespublictransportservices,duetotheirhighrateofuse•TheEVtransitionwillcontinuetorequireconsidered,requirescontinuedpolicyfocusontheaimingtomanagethedevelopmentofEVbatteryandhigherlikelihoodtoleadtonetsavings,onatotalincreasingextractionandprocessingoftransitiontowardsvehicleelectrification,pairedmaterialscanalsohavepositiveimplicationsforcostofownershipbasis.materialsforEVbatteries.Overthecomingwithtargetedpoliciestomitigate,andifpossible,equity,especiallyiftheyarepairedwithotherpoliciesdecades,materialdemandwillnotonlyexceedreverse,thesizeshifttowardsSUVs.thatenhanceaccesstocharginginfrastructure.OtherargumentssupportingthecaseforareversalsuppliesthatmaybecomeavailablefromoftheshifttoSUVscomefromthelonger-termvehicleandEVbatteryrecycling,butgrowingThistransitionisachievablewiththecombinationIfnotpairedwithinvestmentsinthetechnologyriskforOEMstoremainrelevantwiththenewsalesofelectricvehicleswillrequirerapidofforward-lookingpolicyandalignmentoftransitiontowardsEVsbylegacyOEMs,theEVgenerationofvehicleowners.Continuingtoexpansionofmaterialdemandandprocessingindustrystrategyalignedwithlongertermviability.transitionalsoriskscomingwithaweakeningofpursueastrategyoffocusingonSUVscouldhave(IEA,2023c).ElectricSUVsarepairedwithChallengesrelatedtothedemandofmaterialsexistingindustrialclusters.Unlesscompensatedimportantdrawbacks,asyoungvehicleownersarehigherenergyuseperkmandlargerbatteryandmineralsforbatterysuppliesdeservespecificbynewmarketentrants,thiscanleadtooveralloftensubjecttocapitalavailabilityconstraints.38packs,exacerbatingthesechallenges.attention,duetotheirwide-rangingimplicationsdeindustrialization.DuetoimpactsonjobsandMaintainingacontinuedpresenceofOEMsintheforindustrialdevelopment,trade,andgeopolitics.theirgeographicallocation(ILO,2021),thiscanalsosmallervehiclesegmentsisalsocrucial,inhigh-•ExistingevidencesuggeststhatEVimpactsThesechallengesarelinkedwithstressesregardinghavedestabilizingeffectsonsocialandeconomicincomecountries,toreducesocialtensions,asonroadsafetyarenotyetclear.Atthesametheavailability,paceofextractionandprocessingofresilience,especiallyforcountriesthatcurrentlyhaveithelpsaddressingequity-relatedpressuresalsotime,keycharacteristicslikegreaterweightandbatterymaterials(strongerwithlargerEVbatteries)astrongstakeintheautomotiveindustry.36Policiesinvolvingdynamicsthattouchthesecond-handlessnoisearelikelytorequireriskmitigationandtheneedforgreaterdiversificationoftheandstrategicchoicesforindustrialdevelopmentvehiclemarket.strategiestoavoidnegativeimpacts,especiallybatteryvaluechain,alsoforreasonsrelatedwithshouldaddressthesedeindustrializationrisks(or,butnotonlyforvulnerableroadusers.securityofsupply.35incountriesthatdonothavestrongautomotiveIndustryandgovernmentsthatalreadyproducesmallindustryclusters,seizeindustrializationvehiclescanalsoseizeopportunitiesfrompolicy•HighupfrontcostsofEVsalsoexposetheEVPolicyiscrucialtode-risktransformativeinvestmentopportunities),whilenotlosingfocusontheneedtoactionsthatredistributevaluecreationawayfromtransitiontoequity-relatedchallenges,similarchoicesanddirectthemtowardsaproductmixmaintaineconomiccompetitiveness.largevehicleswithhighenergyuse,emissions,andtothecaseoftheSUVshift,sincelow-incomecapableofmitigatingthenegativeimpactsonmaterialdemandprofiles,tocontinuetocompeteforhouseholdsaresubjecttogreatercapitalequity,environmentandroadsafetyhighlightedinChallengesofmakingaffordablevehiclesavailablearoleasatechnologyproviderforthelikelygrowingavailabilityconstraintsandhighercostsofthischapter.Are-envisioningofindustrialprioritiesonnationalmarketscouldbecomeopportunitiesmiddleclassinemergingmarkets.Competitorsborrowing.Thisisrelevantbothdomesticallyisneededtosteercapitaltowardinvestmentsthatforcountriesthathaveretainedhighersalessharescanleveragethesesameopportunitiestoenterinandinternationally,withgreaterexposureforprovidelongertermprospectsformarketgrowthinthesmallermarketsegments,astheyhavethethesemarketsegments,withnetoverallsavingsforlow-incomecountries.andvaluecreation.possibilitytoleverageproductionalreadyexistingmaterialandenergydemand,emissions,androadforthedomesticmarket,turningittowardsexports.safety.SuchastrategywouldleverageincreasesinTABLE4:KeyissuesarisingfromtheanalysisoftheimpactsoftheSUVshiftandtheEVtransitionChinaisparticularlywellpositionedtogainmarketmarketsizeforsmallercars.sharesthroughexportsforitsEVs,thankstoitsCO2emissionsRoadsafetyEquityCriticalmineralalreadystrongEVproductioncapacity–includingPolicymechanismsspecificallyaffectingfinance–suchdemandsmallermarketsegments–andthepervasiveroleasthosestartedwiththedefinitionoftaxonomiesofthatithasacquiredacrossallstagesofthebatteryactivitiesmappingsustainability-alignedinvestmentsElectrificationsupplychain.37–arealsoimportanttocontainrisksrelatedwithSUVshifttheprioritizationofnear-termprofitsastheprimaryDuetotheirdomesticmarketstructure,othermajordriverforinvestmentchoices.InthecaseofshiftingElectrificationandSUVshiftglobalmanufacturerswithstrongerpresenceinthetoSUVs,suchrisksincludethesocializationoflosses,smallvehiclesegmentscanalsobenefitfrompolicyespeciallyrelevantinthepresenceofclimatepoliciesNote:greenindicatesthattheimpactsareminimal,orthatthetrendcanpromotebetteroutcomesonagivenmetric.YellowindicatesthatactioncapableofrebalancingopportunitiesforthatrequirerapidCO2emissionreductions.Theseissuesdoexist,andpolicymakersshouldbeawareofthis,andtheremightbeacaseforregulation.RedindicatesthatissuesshouldbevaluecreationawayfromSUVsandvehicleswithinstrumentsarealsoimportanttosupportinvestmentaddressedbypolicy,intheinterestofsociety,theeconomy,andtheenvironment.comparativelyhighenergydemandandemissions,aschoices–includingelectrification–thatarealignedlongastheycontinuetoinvestindomesticproductionwithscientificevidenceregardingclimate-andcapacitiesforEVsandbatteries.Onthisbasis,OEMsenvironment-relatedimperativesandarethereforethatareactiveinpartsofEurope,India,Korea,Japan,morelikelytobealignedwithsustainedprofitabilityandpartofLatinAmerica–allcharacterizedbysharesovertimeandlowerrisktosocializecosts(withnetofsmallervehiclesthatremainsignificant–arewellbenefitsforsocialstability,especiallyindemocraticpositionedtoexploitopportunities.politicalsystems).Source:thisassessment.33TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION344POLICYOPTIONSTABLE5:Policyoptions,recommendedactions,andthepotentialtoaddresskeyissuesPotentialtoaddressPolicyRecommendationsCO2PollutantBatteryRoadsafetyAffordability,abatementemissionsmaterials,equityChapters2and3documentedtherelevanceofthearepre-requisitesforthediscussiondevelopedinthiscircularitySUVshiftforincreasesinenergyuse,CO2emissions,document.Thesameappliesto:weight,roadsafetyrisksandvehicleprices,aswellasEnergyefficiency/CO2/GHGRampupstringency;adoptfootprintasopportunitiesfromtheEVtransitiontoaddressmany•Safety-relatedtechnicalstandards,regulations,andstandards(withfootprintasmodulatingparameter.Implementnewstandards;ofthesechallenges,withtheimportantexceptionsoftestprocedures,toenabletheproperoperation,modulatingparameter)tightenstandardsonhigherfoorprintvehiclesincreasesinweight(anddemandforbatterymaterials)saferepair,andend-oflifehandlingofvehicleEnsurealignmentwithreal-world,ramp-upandanupwardpressureonvehicleprices(withequityequipmentandparts(includingbatteriesandPollutantemissionsstandardsstringencyincountries/regionslaggingbehind,implications,domesticallyandinternationally).electricmotors,andalsocoveringdurabilitymaintainorincreasestringencyinleadingmarketsaspects),aswellascharginginfrastructureComplementarypoliciesAdoptacomprehensiveandcoherentportfolioThisChapterbuildsuponthetrends(Chapter2)(includingsocketsandconnectors).onrenewablefuels,vehicleofpolicies,eachtargettingaclearlydefinedandtheirimplications(Chapter3),todevelopmanufacturingandend-of-liferegulatedentity,toensurealife-cyclecoveragerecommendationsonpolicyactionsthatcansupport•Energyandenvironment-relatedtechnicalSpecificsafety-relatedregulationsAdoptlegalrequirementsthathavebeencontinuedeffortstotransitiontoEVs,whilealsostandards,regulations,andtestprocedures,suchforEVsandbatteriesdevelopedbytheUNECEWP.29managingmaterial-andequity-relatedchallenges.asthoseregardingthemeasurementsofenergyDifferentiateimportconditionsbasedonvehicleTherecommendationsdevelopeddrawfrompolicyconsumption,CO2andairpollutantsemissions,orVehicletraderegulationsbasedonpowertrain/characteristics(e.g.,forEVs,basedoninstrumentsalreadyadoptedorunderconsiderationtheassessmentoftheirlifecyclecharacteristics,environmentalperformanceemissions,etc.)thatattempttosteertheautomotivemarkettowardsunderpinningpossibilitiestodevelopotherpolicies.Differentiateaccessbasedonvehicleenhancedsustainability,whileenablingeconomicUrbanaccessrestrictionsbasedonenvironmentalperformancedevelopmentandpreservingorenhancingequity.•CommunicationprotocolsandpaymentenvironmentalperformanceinstrumentsallowingtoperformchargingRegulationsspecificallytargettingMoreambitiousEVsalesrequirements,ThisChapteraimstooffersuggestionsonmeasuresoperationandrelatedeconomictransactions,highlyutilisedvehicles,basedonincentivisingormandatingall-electricvkmthatcanenablebothconsumersandOEMstofindespeciallyimportantforthevehicletoenvironmentalperformanceaddedvalueinsustainability-alignedvehiclefeatures,infrastructureinteraction.ApplyamaximumLDVfootprint,aswellasaratherthaninoptionsthataredetrimentaltohealthRegulationsonvehiclefootprintCAFEregulationatasmallerfootprinttostimulateandtheenvironment.Thefocusisoninstruments•Technicalguidelinesforfirstrespondents,productdiversificationthatorientconsumerandindustrychoicestowardsnecessaryfornewtechnologiestoensuresafetyinRegulationsonEVbatterycapacityApplyaCAFEregulationmandatingamaximumtechnologiesofferingimprovementsinenergyandcaseofcrashes.batterycapacityinkWhresourceefficiency,emissionreductions,androadAdditionalroadsafetyRequireadditionalpassiveandactivesafetysafety.Complementaryrecommendationsalsoaccount•Workforcesupportneededtoensureavailabilityofrequirementsonheavyvehiclesequipmentonvehiclesexceedingagivenweightfortheneedtoensurethatthistransitionisinclusiveskilledlabouracrossallthestepsoftheautomotive,thresholdandsociallyfair,bothdomesticallyandinternationally.energy/electricityandbatteryvaluechains.Differentiatedpurchase/registrationtaxes(includingVAT)ModulatetaxesfactoringinweightdifferencesTheserecommendationsbuildonworkdevelopedAlternativedecarbonizationoptionstoEVsusingbasedonvehiclecharacteristics(e.g.,excludinglargerandheaviervehiclesfrominearlierassessments(inparticularIEA,2018,ITF,batteries(PHEVsandBEVs),suchashydrogen(fuelcell(includingfootprintandweight)rebates)2021b,GFEI,2021,Khanetal.,2022,CazzolaandorICE)vehicles,biofuelsande-fuels,oroffsets,arenotSantosAlfageme,2023),integratingspecificinsightsthefocusofthisanalysis.Thereasonsforthisare:DifferentiatedannualtaxationonIncreasestringency(andtaxationlevels)forolderregardingthechallengesassociatedwiththeSUVshiftvehicleownershipvehicles,withpoorerenvironmentalperformanceandtheEVtransitiondiscussedinChapters2and3.•limitedavailabilityofsustainablyproducedDifferentiatelocaltaxes/chargesbasedonvehicleNovelrecommendationsincludedherefocusonpolicybiofuels,limitedmarketdeploymentandhighDifferentiatedimportdutiespowertrain/characteristics(e.g.,forEVs,basedoninstrumentstargetingvehicleweight,batterymaterials,investmentrisksassociatedwithoptionsusingemissions,etc.)andequityconsiderations.Byaddressingweight,theyhydrogenasenergycarrier(bothforvehiclesandDifferentiatelocalvehicletaxesDifferentiatelocaltaxes/chargesbasedonvehiclealsoaimtoimproveroadsafety.refuellinginfrastructure);andchargespowertrain/characteristics(e.g.,forEVs,basedonemissions,etc.)Table5summarizesthepoliciesoutlinedinthischapter,•farlowerenergyefficiency,forallhydrogen-basedFueltaxationandcarbonpricesDifferentiatelocaltaxes/chargesbasedonvehicletheactionsrecommendedwithrespecttoeachofthem,options(includinge-fuels),withimplicationsonpowertrain/characteristis(e.g.,forEVs,basedonandtheissuesthattheyhavethepotentialtoaddress.costs,makingthemlesscompetitivethanEVs;39andRoaduserchargesemissions,etc)IncreasefueltaxestolevelscommensuratewithTheimportanceofestablishingavisionregardingthe•thesheersizeoffossilenergydemandthatneedsRedistributivemeasuresenabledtheexternalitiesoffuelconsumption,thesameEVtransition,ofsettingcleartargets(alsoregardingtobereplacedtodecarbonizeroadtransport,byrevenuegenerationfromcarbonappliesmorebroadlytoeconomy-wideemissionsaccesstocharginginfrastructure)andofbroadeningrequiringextremelylargedeploymentofcarbonpricingandroaduserchargesGraduallyadoptroaduserchargestocomplementunderstandingofthebenefitsofEVs(includingthroughdioxideremovals,incontrastwithwhatisdeemedEVchargerdeploymentandotherfueltaxestofundtransportinfrastructureandpilotprojects)arenotdiscussedindetailhere,astheyfeasibleinIPCCscenarios(IPCC,2022).40regulationstoscaleupchargingcoverexternalitiesavailabilityUseofrevenuesfromtaxationreformstopromoteSustainablefinanceframeworkforpublictransportandtargetincentivesandsupportsustainableactivities(includingtolow-incomehouseholdsandbusinessesEVsandrelatedinfrastructure)MandateorincentivisetheprovisionofachargingScaleupdevelopmentaidfornetworksufficienttoensureautonomyonalltripssustainableactivities(includingwithoutexcessivebatterycapacityEVsandrelatedinfrastructure)AdoptataxonomysimilartotheoneputinplaceintheEuropeanUniontoorientinvestmentstowardssustainableactivities,includingEVsScaleupmultilateralfundingtosupportaninclusiveEVtransitiongloballyNotes:darkgreenindicatesthatthepolicycanbedesignedtodirectlyimpactortargetagivenissue.Lightgreendemotespositiveindirectimpacts.Yellowindicatesneutraleffects,orthateffectsdependonspecificcircumstances.Orangestandsforadverseindirectimpacts.Redindicatesadverseimpacts.Source:darkgreenindicatesthatthepolicycanbedesignedtodirectlyimpact,ortargetagivenissue.Lightgreendemotespositiveindirectimpacts.Yellowindicatesneutraleffects,ordependentonspecificcircumstances.Orangestandsforadverseindirectimpacts.Redindicatesadverseimpacts.35TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION364.1REGULATORYandmaintenanceofvehiclesandoftheirsupportTABLE6:Regulationsrequiringreductionsinenergyintensity,directCO2andlocalpollutantemissionsfornewvehiclesinselectedmarketsPOLICYFRAMEWORKSinfrastructure.GiventhehigherweightofEVs,withONENERGY,repercussionsontyrewear,itisalsoimportanttoCountryFueleconomy/CO2/GHGandpollutantemissionsstandardsENVIRONMENTANDensurethatpollutantemissionregulationseffectivelyorregionSAFETYaccountfornon-exhaustemissions.However,itArgentinaCurrentpollutantstandardsareEuro5a.isimportanttoacknowledgethepossibilityofnetAustraliaAustralia’spollutantemissionsstandardsarecurrentlyatEuro5equivalence,areharmonisedwiththeEuropeanstandards,and4.1.1ENVIRONMENTALREGULATIONSbenefitsonnon-exhaustemissionsforEVs,duetoBrazildifferbasedongrossvehiclemass.reducedparticleemissionsfromregenerativebraking.CanadaPollutantstandardsarePROCONVEL8(passengercars),andPROCONVEL7(LCVs).StabilisingglobaltemperaturesandmitigatingtheWorkrecentlyfinalizedbytheUnitedNationsWorldFleetaverageGHGlimitsforpassengercarsandlighttruckscurrentlymandatea5%improvementperyearthrough2025andimpactsofclimatechangerequiresswiftactionontheForumforHarmonizationofVehicleRegulations,ChilearecloselyalignedwithUSstandards.reductionofgreenhousegasemissions.Addressingfocusedonthedevelopmentofrelatedmeasurementthehealthimpactsofpoorairqualityinurbanareas,methodologies,providesasolidfoundationforfurtherChinaSince2015,Canada’spollutantemissionsstandardshavebeenalignedwiththeUSFederalstandards.acrosstheglobe,alsorequiresswiftactiontoreducepolicydevelopmentsinthisarea(UNECE,2023a).AnewCAFEfueleconomystandardwillcomeintoeffectin2024,mandatinglimitsof18.8km/Lge(forPLDVs)and18.3km/localpollutantemissions.EuropeanLge(forLCVs).AdoptingaholisticapproachisimportantnotonlytoUnionRegulationslimitingemissionsofgreenhousegasesandtriggeraneconomy-wideresponsetothechallengeNewlyregisterednewLDVmodelsmustmeeteitherEuro6borU.S.EPATier3Bin125standardsfromSeptember2022,whilenewlylocalpollutantsarekeypolicyinstrumentsaimingtoofclimatechange(ratherthanasectorialone,whichIndiaregisteredusedLDVsmustcomplybyFebruary2023.BySeptember2024,newregistrationsofbothnewandusedvehiclesmustachievethesegoals.RegulationsrequiringreductionswouldanywaybeinsufficienttobringGHGemissionsIndonesiacomplywitheitherEuro6corU.S.EPATier3Bin70.ofdirectemissionsofCO2andlocalpollutants,withatonetzero),butalsotoreducethelikelihoodforJapanPhaseVstandardssetafleetaveragetargetof4.0L/100km(NEDC)by2025,andincludebothaper-modelstandardandaspecificfocusonLDVs,havealreadybeendeployedinregulationstoleadtounintendedconsequences.42TheCAFCstandard.severalcountries.Thisisnotonlythecaseinhigh-incomeEuropeanregulatorypolicyportfolio—summarizedKoreacountriesorgroupsofcountries,liketheEuropeanUnioninTable7—providesaclearexampleofregulatoryChina6(similartoEuro6)across16regions;China5(similartoEuro5)nationwide.ortheUnitedStates,butalso,inlow-andmedium-approachesthattargetdiscretepartsofthevehicleMexicoThe2023CO2emissionperformancestandardsforcarsandvansrequireachievingCO2emissionsreductionsrelativeto2021incomecountries,includingmajoreconomieslikeChinalifecycle,eachwithaclearlydefinedsetofregulatedNewof:15%by2025;55%(cars)/50%vansby2030;and100%by2035.andIndia(assummarizedinTable6).entities,inordertoensurethattheoverallapproachisZealandeffectivelyholistic.RussiaTheEU’scurrentpollutantemissionsstandardsareatEuro6d(fromJanuary2021).AproposalforEuro7emissionsstandardsisRegulationsgenerallytendtobetechnology-neutral,Perucurrentlyundernegotiation.toenableandspurinnovationsavailableatthelowestInternationally,theUNECEWorldForumforThailandIndia’scurrentCAFEtargetis113gCO2/kminApril2022fornewcars.possiblecost—anexceptionistailpipeairpollutantHarmonizationofVehicleRegulationsestablished,emissionsstandards,whicharedevelopedbasedonin2022,aninformalworkinggrouponAutomotiveUnitedBSVIstandards(basedonEuro6)applytoallLDVsfromApril2020.techno-economicassessmentsofpowertrain—andLifeCycleAssessment(UNECE,2023b),withtheaimStatesCurrentpollutantemissionsstandardsforgasolineanddiesellight-dutyvehiclesareEuro4equivalent.fuel-specificemissionscontroltechnologies.OverthetodevelopaharmonizedmethodologytomeasureThecurrentTopRunnerprogrambeganin2022andrunsthrough2030–targetinga32.4%improvementinfuelconsumptionpastdecade,basedontheverydynamictechnologyandGHGemissionsincurredbyvehiclesacrosstheirby2030comparedwiththe2016fleetaverage.marketdevelopmentsofEVs,manyoftheseregulatorylifecycles.43Thiscanofferanobjective,scientificandinstrumentsalreadyintegrateprovisions—suchasmultilaterallydevelopedbasistoOEMsandpartsJapan’spollutantemissionsstandardsareequivalentinstringencytoEuro6,withtestingsince2018conductedontheWorldwideincentivesortargetedsalessharerequirements—thatsupplierstodocumentperformancerelatedwithGHGHarmonizedLightVehiclesTestProcedure(WLTP).addressthespecificcaseofEVs.Keyreasonsforthisemissionsembodiedinmaterialsandcomponents.Adopted2030GHGtargetsrequirereductionsof27.8%forcarsand12%forlighttruckswhencomparedtoa2020baseline,lieintheeffectivenessofEVsinmitigatingemissions,Theharmonizedapproachwouldalsoensurethatwhile2030fueleconomystandardsare37.3%morestringentforcarsand22.7%forlighttrucks.Manufacturersmaychooseimprovingenergyefficiency,andenablingcost-effectiveconsumerscantakedecisionsaccountingforthetocomplywitheithergreenhousegasorfueleconomystandards.accesstoamorediversifiedenergymix(includinguseoflow-carbonoptionsandcouldtherebyofferascalableformsofrenewableenergy)inroadtransport,complementarysetofincentivesbeyondnationalorForpollutantemissionsstandards,forgasoline-fuelledvehicles,KoreaadoptsCalifornia’sNon-MethaneOrganicGasesfleetaverageaswellasinthesignificantimplicationsforindustrialregionalpolicyapproaches.system,whiledieselvehiclesaresubjecttoEuro6regulations.transformationsanddevelopment.41CurrentCO2andfueleconomystandardsarebasedonfootprint-basedUSstandardsfrom2012-2016buthavenotincreasedinstringencysincethattime.Stabilisingglobaltemperatureswouldrequireratchetinguptheambitionofregulatoryrequirements,andnotAmixofU.S.Tier1to2emissionslimitsandEuro3and4standardshasbeenineffectsince2004.onlyreachingzerodirectemissionsfromvehicleuse,From2022,theCleanVehicleStandardappliesGHGemissionsstandards.In2023,thestandardis145gCO2/kmforPLDVs,butalsoeffectivelyabatingGHGemissionsassociatedand218gCO2/kmforLCVs.Theseincreaseinstringencyto63.3gCO2/kmand87.2gCO2/kmin2027forpassengerlightwiththeproductionoffuels,aswellasthemanufacturedutyvehiclesandLCVs,respectively.From2016,Euro5standardsapplytoallLDVs(importsanddomesticalike).Forpollutantemissions,from2016,light-dutyvehiclesmustmeeteithertheEuro4ortheUSTier2standards.In2021,Peruestablishedstandardsthatrequirelight-dutyvehiclestocomplywithEuro6borU.S.Tier3/EPA2010emissionslimitsbyOctober2024.LDVpollutantemissionsstandardssince2012havebeenatEuro4.TheDecember2021greenhousegas(GHG)standardsforlight-dutyvehiclesrevisesCAFEstandardstobemorestringentinmodelyears2023-2026,withtargetedtemporaryflexibilitiestoaddressproductionleadtimesandincentivizeproductionofnear-zeroandzero-emissionvehicles.ThesearealignedwiththeCAFEstandardsformodelyears2024-2026forcarsandlighttrucks.Proposedmultipollutantstandardsforlight-andmedium-dutyvehiclesfor2027-2030areunderdiscussion.ThesewouldregulateGHGsaswellascriteriaairpollutants(PM,ozone,nitrogenoxides,andcarbonmonoxide).InCalifornia,LowEmissionVehicle(LEVIII)standards,whichapplybothGHGandparticulatestandardsbecomegraduallystricterfrom2015-2025.VietnamAirpollutant(criteriapollutants)arecurrentlyregulatedunderU.S.Tier3standards(whichapplythrough2025).Asof2022,light-dutyvehiclesareregulatedundertheEuro5standard.Notes:Textinitalicsreferstoemissionsoflocalpollutants.OthertextreferstoenergyefficiencyordirectemissionsofCO2.Sources:TransportPolicy.net(n.d.),AustralianGovernment,n.d.,SAC,2021,EuropeanCommission,n.d.,True,2021,ICCT,2019,ICCT,2013,NHTSA,2022,ARB,n.d.,EPA,2023.37TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION38TABLE7:ComplementaryEUregulationsaimingforaholisticapproachonGHGemissionreductions4.1.3USEOFREGULATIONSINVEHICLE4.1.5TARGETEDREGULATORYTRADEREQUIREMENTSFORSPECIFICUSAGELife-cycleemissionphasesProcessesRegulatoryrequirementsOtherpolicytoolsPROFILESAnumberofregulatoryinstrumentsarealreadyusedVehicledesign,manufacture,Vehicledesign,manufacture,Regulationoncircularitytoregulatevehicletradeflows.CurrentpracticesrangeEnvironmentalregulationspromotingenergyefficiencyincludingmaterialextractionincludingmaterialextractionrequirementsforvehiclefromfulltraderestrictions(e.g.,forusedvehiclesimprovements,CO2andlocalpollutantemissionandprocessing,andend-of-andprocessing,andend-of-lifedesignandonmanagementinmajormanufacturingcountriesormarketslikesavings(includingviatheEVtransition)havethelifemanagementmanagementofend-of-lifevehiclesBrazilandIndia)totheabsenceofanyrestrictionsstrongestmeritforhighlyutilizedvehicles,given(proposed)whatsoever(e.g.,withinfree-tradeareaslikethethatthesearetheoneswhereupfrontcosts(andEnergyproductionVehiclecomponentdesignEuropeanUnionandtheNorthAmericanFreeTradealsoemissionsresultingfrombatterymanufacturing,andmanufacture,includingBatterydurabilityCarbonpricing(EmissionAgreement).ThediversityofregulationswasoneofforEVs)canbemostrapidlyoffset,thankstolowerVehicleandfuelusematerialextractionandrequirements(UNGlobalTradingScheme)thekeyreasonsbehindinternationaleffortsaimingtooperationalcosts,lowerenergyrequirementsperkm,processing,andend-of-lifeTechnicalRegulation22,harmonizeregulatorytexts(UN,2021).and(intermsofsocietalandenvironmentalcosts)managementrecentlyintroduced)CarbonBorderAdjustmentlowerGHGandpollutantemissions.45PrimaryenergyextractionMechanismParametersusedtoregulateinternationalusedvehicletradeflowstypicallyincludeageandpollutantLikeenvironmentalregulations,thereisalsoacaseforEnergyconversionEUbatteryregulation(recentlyEnergyEfficiencyDirectiveemissionlimitsandnecessitatecompliancewithhigherstringencyonsafetyrequirementsforhighlyupdated)EffortSharingRegulationkeyroadworthinessrequirements,leveragingUNutilizedvehicles,duetotheirmorefrequentpresenceinEnergyuseduringoperationsregulationsfortechnicalconsiderations.activetraffic—whichincreasesthelikelihoodofcrashes.RegulationonmethanePoliciestargetingeconomy-emissionsintheenergysectorwidedecarbonisation,Veryfewtrade-relatedregulationsintegrateaspectsPublicprocurementpoliciesarewellsuitedtorequire(proposed,beingnegotiated)includingfromtheindustrydirectlylinkedwithenergyefficiencyandCO2greaterregulatorystringencybyincentivizingorsector(e.g.,steel,aluminiumemissions,andparticularpowertraintypes(includingrequiringdisproportionateprocurementofEVsRenewableenergydirectivemanufactureandrecycling)EVs).NewZealand’sCleanCarStandard,whichcameandadoptionofenhancedroadsafetyfeatures.(proposedupdate,closetobeintoeffectin2023,isthefirstregulatoryinstrumentThisappliesbothincaseswherepublicauthoritiesfinalizedthatrequiresimporterstoreducetheCO2emissionssubsidizetheacquisitionofvehiclesusedforsharedofthevehiclesenteringthecountry(WakaKotahi,transportservicesandwherevehiclesaredirectlyElectricitymarketdesignn.d.)anditrepresentsabestpracticecaseglobally.ownedbythepublicadministration.46(proposedupdate,beingVehiclesarecollectivelyrequiredtomeetasetofnegotiated)targets,currentlysetuntil2027,withagrowinglevelof4.2REGULATORYstringencyovertime(TeManatūWaka,n.d.).Non-CHANGESTORegulationontailpipeCO2Vehicletaxationcomplianceissubjecttothepaymentofpenalties,ADDRESSVEHICLEemissionsFueltaxationpervehicleandgCO2/km,similartoregulatoryWEIGHTINCREASESrequirementsinplaceintheEuropeanUnion(onlyANDEQUITY-RELATEDTargetedcarbonpricingforapplicabletonewvehicles).ThestandardisalsoCHALLENGESroadtransportpairedwithdifferentiatedvehicletaxation(theCleanCarDiscount),asdiscussedinsection4.3.EvidenceavailablefromChapters2and3showsSources:thisanalysisbasedonlegalandnegotiatingtextsinUN,2022;EuropeanUnion,2023a;EuropeanUnion,2023b;EuropeantheimportanceofintroducingoraddingelementsCommission,n.d.;EuropeanCommission,2021,EuropeanParliament,2023a;EuropeanCommission,2019,EuropeanCouncil,2022,European4.1.4URBANACCESSRESTRICTIONSaccountingforweight-andequity-relatedissuesParliament,2023b;andEuropeanUnion,2023c.toexistingregulatoryframeworks.DoingsocanRegulatorymeasuresexistnotonlyatthenationaleffectivelymitigatethenegativeeffectsoftheSUV4.1.2ROADSAFETYREGULATIONSequipmentofvehiclestoreducethechanceandorsupra-nationallevel,butalsoatregionalandshiftonenergyefficiency,GHGemissions(especiallyseverityofcrashes.Therequirementsalsofacilitatemunicipallevels,especiallyinEurope(UrbanAccessforICEVs)andmaterialdemand(especiallyforEVs).RegulationsarealsoappliedtoroadvehiclestotradebyreducingdivergenceacrossmarketsandRegulations,n.d.).LowEmissionZones(LEZs)andimproveroadsafety.Thesespanavarietyoftopics,providingaclearregimegoverningliability(PerniceZeroEmissionZones(ZEZ)arethemostcommonincludingactivesafety(brakes,steering,tyres,andDebyser,2023).typeoflocalenvironmentalregulationappliedtoelectronicstabilitycontrols),passivesafety(toroadvehicles.TheygenerallyrestrictaccesstominimizetheriskandseverityofinjurytovehicleSpecificsafety-relatedregulationsaddressthecasesub-categoriesofvehiclesbasedonenvironmentaloccupantsortootherroadusersincaseofcollisions,ofEVsandbatterytechnologies.Theserequireperformance(insomejurisdictionslimitingaccesssafetybelts)andothergeneralsafety-relatedaspectscontinuousmonitoringandupdates.KeyexamplestoEVsandothertechnologieswithzerotailpipeCO2(e.g.,glazing,lighting).Newtechnicalprovisionsandincludethecaseofrequirementsrelatedtothermalandlocalpollutantemissions).Insomecases,theyarealsobeingdevelopedtoaddressthespecificitiesofrunaway,thermalpropagation,electrolyteleakage,complementurbanaccessfees,discussedinSectionvehicleconnectivityandautomation(UN,2021).andsafetyrequirementsintheeventofacrash.These4.3.4,onvehicletaxation.issuesarebeingaddressedbytheUNWorldForumTheadoptionoftheserequirementsisrootedinfortheHarmonizationofvehicleregulations(UNECE,theneedtoimprovethebehaviour,handling,and2023c;UNECE,2023d;ITF,2020b).4439TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION404.2.1REGULATIONSONVEHICLEImportantly,thisapproachcanalsoeffectively•End-of-liferequirements(includingcollectionwithincreasingstringencyofthestandardsasFOOTPRINTintegrateflexibilitymechanisms(includingOEMtargetsandobligationstargetsfortherecoveryvehiclefootprintincreases,offerstheopportunitypooling),enablingcontinueddiversificationofofmaterials)—suchasthosealreadyintegratedtoeffectivelytightentherequirementsapplicabletoTheintroductionofacaponvehiclefootprint,productsandstrategiesfordifferentOEMs(includingintheEUBatteryRegulation(EuropeanUnion,largervehicles(includingbothICEVsandEVs).inabsoluteterms,couldeffectivelylimitvehiclethepossibilitytomeettheneedsofhighlyutilized2023b).Theseareparticularlyrelevantinsizeincreases.Acorporate-averageregulatoryvehicles,suchastaxisandsharedcars,forwhichaddressingchallengesrelatedwithEVbatteryMostregionshaveadoptedregulationsusingweightrequirement,similartothoseinplaceforfuellargerbatterypacksarejustifiablyrequired).materialdemand.Thisisespeciallyimportant(andnotfootprint)asamodulatingparameter.economyorCO2emissionsbuthavingfootprintasforthenextgenerationofEVbatteries,astheseUndersuchaframework,CO2emissionsstandardstheregulatedparameter,wouldalsohelpreverseEquityaspectscouldalsobeindirectlytargetedbythisregulatoryobligationscanensurethatthearemorestringentforlightervehicles.VehicletheSUVshiftobservedsince2010andcouldapproach,asgrowthinbatterycapacitiestendstobenecessaryinvestmentstoenabletherecyclingoflight-weightingisaneffectivemeanstoreducecomplementacap.pairedwithgreaterdeploymentofEVsinlargervehiclebatterymaterialscanbemadeontime,facilitatingfuelconsumption,butweight-basedstandardsfailsegmentsandacaponthefleet-averagecapacitycangreaterrelianceonrecycledmaterialsasEVstoincentivizeenergysavingtechnologiesbasedFootprint-basedregulationscouldbebetterthaneffectivelypromoteadifferentiationoftheofferaswellintroducednowandinthenearfutureapproachonweightreduction,aslowerweightvehiclesareweight-basedones,asthelatterwouldneedasgreaterdiversityofdifferentbatterysizesavailabletheendoftheirusefullife.subjecttomorestringentCO2emissionslimits.differentiatedtreatmentfordifferentpowertrainsforanygivenmodel.Hence,wheneverpossible,switchingfromweight-(namelyforEVs,duetobatteryweight),subjecttoDuediligencereportingrequirements—alsobasedtofootprint-basedstandardscanhelptouncertaintiesduetovaryingenergydensityacrossThisnovelregulatoryapproachcanfurtherofferintegratedintheEUBatteryRegulation—aimtoeffectivelyincentivizelight-weighting.differentbatterytechnologies.importantopportunitiestointroducedemand-addresssocial(includingprotectionofhumanrights,basedpoliciestoaddresschallengesspecificallyhumanhealth,communitylife,includingthatofAlternativeapproachesbasedonweightastheThecapwouldcomewithstrictlimitations,withoutrelatedwiththesurgeindemandforEVbatteryindigenouspeoples,theprotectionofchildren,andmodulatingparameterarepossible,buttheyhaveflexibilitymechanisms,butitwouldonlybeapplicablematerialsaccompanyingtheEVtransition,alsogenderequality)andenvironmental(protectionoftherisklosingeffectivenessinpromotingtheuseoftothelargestvehicles.Sales-weightedregulatoryhelpingtomoderateeventualsupplyconstraints.thenaturalenvironmentandbiologicaldiversity)materialsubstitutionandlight-weightingsolutionsasapproachesarebettersuitedtoinducefleet-wideIfbasedonbatterycapacity,ratherthanweight,itconsequencesofindustriesinvolvedintheextraction,energy-savingtechnologiesforICEVs.changes,integratingflexibilitiestoenablecompliancecouldleavegreaterroomforchangesinchemistriesprocessing,andtradeofcertainrawmaterialsandleaveroomforproductdiversification.tohelpinachievingthisgoal.Ifbasedonweight,andsecondaryrawmaterialsusedforbatteryRegardlessofwhichmodulatingparameterisapplied,itcouldlimittherelevanceoftechnologiesthatmanufacturing.Theseareimportantformanagingtighteningrequirementsforlarger(inthecaseofRegulationsonfootprintcouldhavepositivehavelowergravimetricenergydensitiesthanthoserisksassociatedwithEVbatterysupplychains,andfootprint)orheavier(weight)light-dutyvehiclesimplicationsforequity,astheywouldreducethealreadyinuse.arealsobeingusedavoidde-industrialization(awouldhavepositiveimplicationsforenergyandscopeforcontinuedsizeincreases,therebyaddressingchoicethatneedstobeaccompaniedbyastrongCO2savings,withoutnegativeequityimplicationschallengesarisingfromthetransformationsoccurringDuetocompetitionamongmajoreconomiesforthefocusontheneedtoensureeffectiveindustrial(aslargervehiclestendtobesoldathigherinautomotivemarkets.acquisitionofbatterymaterials,47thispolicyislikelycompetitivenessandtheavoidanceofprotectionism,pricespurchasedbywealthiercustomers,andaretorequireinternationalcoordinationtobemaximallyforreasonsofeconomicsustainability).thereforethosewithgreatermarginsavailablefor4.2.2REGULATIONSONBATTERYeffectiveandviable.Forthisreason,internationalforaEVdeployment,resultinginahighershareoftheEVCAPACITYwithspecificmandatestomonitortheavailabilityandTheseprovisionsareadditionaltootherdeploymentcostfallingonpremiumvehiclemodels).priceofcriticalmaterialsandtoensurecontinuedrequirementsonbatterydurability(importantforAsecondnewregulatoryinstrument,cuttingacrossavailabilityatthegloballevel,asinthecaseoftheIEA,theoptimaluseofminerals,inadditiontoconsumerRegulatoryrequirementsthatarefocusedonCO2environmentalandsafetyaspects,couldbeparticularlycanplayacrucialenablingroleinthiscontext.protection),whichsawamajormilestonebeingemissionsratherthanbeingspecificallydesignedwellsuitedtoensureeffectiveandefficientutilizationfinalizedin2022,inthecontextoftheWorldForumforEVscanalsobenefitsignificantlyfromlegalofbatterymaterials.Thiscouldalsobebasedona4.2.3OTHERREGULATORYfortheHarmonizationofVehicleRegulationsframeworksenablingthedevelopmentofstrategiescorporate-averageregulatoryapproach,solelyappliedREQUIREMENTSAPPLYING(UNECE,2022).Batterydurabilityrequirementsbasedonlifecycleaccounting.InEurope,arecenttoEVsandhavingbatterycapacityastheregulatedSPECIFICALLYTOBATTERIESforLDVsrequirethatEVsretainatleast80%(andproposaldevelopsharmonizedrulesforaccountingparameter.Therequirementcanbesettoprevent70%)oftheirchargeforatleast5(and8)yearsGHGemissionsoftransportservices(EuropeanorevenreversethecontinuedtendencytowardsanSpecificregulatorytoolscanalsobeappliedtoor100,000km(160,000km),whichevercomesCommission,2023a).ThiscanhelpestablishingincreaseinbatterysizesshowninFigure20.batteries,astheyarekeycomponentsofEVs,withfirst,andoutlinehowtoaccountfor“virtualrange”alevelplayingfieldbetweentransportmodes,majorrelevanceforvehicleweightandevolutionsinincaseswhereEVsareusedtoprovidepowertowhichcanhelptomoreeffectivelyallocatematerialUsingweightastheregulatedparametercouldalsomaterialdemand.Regulatoryrequirementsregardingelectricitygrids.Similarrequirementsarenowbeingdemandoccurringfromsystemicresponses,notbepossiblebutitrisksleadingtolimitationsintheextendedproducerresponsibilitycanbeintegrateddevelopedalsoforheavy-dutyvehicles(UNECE,limitedtoshiftsacrosslight-dutyvehiclesegmentswayinnovationcanhelpaddressmaterialavailabilityintoexistinglegislation.Thesecanaddress:2023e)and–likeotherUNGlobalTechnicalandpowertrains.Equityimplicationsdependoncriticalities.ThisisduetothefactthatsomeoftheRegulations–offeranopportunityforacommonthenatureofthesystemicresponse.Asystemictechnologiesalreadyusedtohandlematerialavailability•Materialtraceability,solutionsfacilitatingbasisforcountry-specifictransposition.responsetoemissionreductionfortransportservicesconstraintsrelyonbatterychemistriesthathavelowerre-use,repurposingandrecycling(includingcanconsistofanincreasedrelianceonsmallerEVs,energydensities(suchasLFPorsodium-ion,ratheranelectronic“batterypassport”—adigital4.2.4CHANGESINEXISTINGprovidingopportunitiestolowerelectricitydemand,thanNMCorNCA),whichispartlycompensatedbyrecordonbatterypacksthatprovidesdataonENVIRONMENTALREGULATIONScharginginfrastructureneedsandbatterymaterialsimprovedcell-to-packarchitectures(asdiscussedinbatterycharacteristics,suchcarbonfootprint,requirements(ITF,2023).SuchashiftcouldalsoSection3.3.2).stateofhealth,proceduresfordismantling,andTheuseofvehiclefootprintasamodulatinghelpaddressequitychallenges,sincesmallerelectriccompositionofthebattery).parameterofexistingregulationsonspecificenergyvehicles(includingquadricycles,discussedinBoxconsumptionordirectCO2emissions,incombination3,andtwo-orthree-wheelers)aremorelikelytobeavailableatlowerprices.41TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION42BOX3:4.2.5CHANGESINEXISTINGROADthecaseofequity,positivespilloversareespeciallySAFETYREGULATIONSimportantinemergingeconomies(duetogreaterTHECASEOFQUADRICYCLESdifficultiestoovercomehigherupfrontcosts).TheGiventheirimpactonweight,documentedinreasonisthatatargetedpolicyapproach,e.g.,Electrificationhasbeenaccompanied,especiallyinwithmanufacturingcostsavings,enablingquickerChapters2and3,andtheirgrowingmarketshares,mandatingacceleratedEVadoptionforridesharingAsiaandalsotosomedegreeinEurope,byincreasingmarketdeploymentandshortenedtimetomarketEVs—likeSUVs(whichalsohaveadditionalchangesandtaxiservicesorgovernmentfleets(allofwhichinterestinquadricycles,four-wheeledvehiclessubject(Robert,2020).ingroundclearance)—alsoneedstringentroadfacelowercostofaccesstocapitalthanlow-incometolimitationsonmaximumweightandspeed.Reasonssafetyrequirements.householdsandbusinesses)canbringmoreEVstoforthisinterestincludeaffordabilitychallengesforOtherreasonsthatspurredOEMinterestalsoemergingeconomies,alsomakingEVsmorebroadlyconventionalLDVs,stemminginpartfromtheSUVincludeopportunitiestoattractyoungercustomers,73NewCarAssessmentProgrammes(NCAPs)haveavailablelocallyinthesecond-handvehiclemarket.shiftandEVtransition,recentincreasesinfuelprices,pairedwithpositiverepercussionsrelatedwithbeenpromotedbyconsumerprotectionorganisationsandopportunitiesforOEMstodeploythesemodelsbrandloyalty(Adolf,2022),andlimitedrisksfortoenhancevehiclesafetyfeatures,tointegratebestGoodpracticeexamplesexistindevelopedandatlowerpricepointscomparedtoconventionalcars.thesevehiclestojeopardizetheirmainmarkets(aspracticesinexistingregulatorytextsrelatedwithemergingeconomies.InCalifornia,theCleanMilesIncreasedrelianceonquadricyclescanalsobeparttheyalsocompeteaspossiblealternativestotwo-activeandpassivesafety(EuroNCAP,2022).TheyStandard(GovernmentofCalifornia,2018)requiresofasystemicresponsetothedecarbonizationandwheelers),alsolinkedwithrestrictionsintermsofalsohaveatrackrecordofbeinganimportantdriveraprogressivereductionofGHGemissionsperelectrificationoftransportservices(ITF,2023).segmentsubstitutionpotential.74ofenhancementsofinternationaltestprocedurespassengerkmbyridesourcingservices,encouragingunderpinningtechnicalregulationsonroadsafetyafasterEVtransitionforthehighlyutilizedvehiclesThespecificregulatorydevelopmentsinplaceforToensurethatitcaneffectivelyleadtonetbenefits,(GlobalNCAP,2018;Perl,2020).Theworkalreadyprovidingthem.49InLondon,amandaterequiringalllighterEVs(includingquadricycles)couldbeanincludingintermsofsafety,ashiftinfocusfromcarsdevelopedintheseframeworksisparticularlyrelevantnewlyregisteredtaxistobezero-emissioncapableenablerofmarketgrowth:theseparate(andlesstowardsquadricycles–includingelectricones–intoofferingsolutionstoimproveandexpandthescopeasof2018wasfollowedshortlyafterwardsbyastrict71)regulatoryframeworktowhichquadricyclesurbanareas,needstobeaccompaniedbyadequateofsafetyregulations.voluntarycommitmentfromUbertotransitionaresubject72hasbeenanimportantfeaturemakingsafetyprovisions(ITF,2023).KeyexamplesincludeeverycarontheappintheBritishcapitaltobefullyquadricyclesattractivetoOEMs,asthisallowedforchangesincurrentprovisionsregardingtheuseDuetoitsspecificrelevanceforroadsafety,weightcanelectricby2025(ITF,2020a;TfL,2016;Mayoroffasterdesignprocesses,minimizationofcomponentsofairbags,crashtestsandothersafetyfeaturesalsobeconsideredasacriterionfortheintroductionLondon,2019;Uber,2018).50IntheBalkans,Tiranaand–forsuccessfulmodels–hasalsobeenpaired(NCAP,2016).ofadditionalsafetyregulationsand/orrequirements(Albania)gaveprioritytoEVs,HEVsandEuro6tointegrateactivesafetyfeatures.Consideringvehiclestoenableaccesstoadditionaltaxilicenses.thecorrelationbetweenvehiclesize,weightandThishasledtoinvestmentsbyseveraloperatorstoprice,documentedinChapter3andinIEA(2019a),deployEVsandtoinvestincharginginfrastructure,differentiatedsafetyrequirementsbasedonweightstartingasearlyas2016,withcontinuouslycouldalsobringaffordabilitybenefits,astheycouldincreasingEVandchargingstationdeploymentoverincreaseaffordabilityandconsumerdemandforlightertime(EnergNETMob,2021).vehicles",whilefocusingpricesincreasesonheavy(andanywaylessaffordable)marketsegments.Specificregulatoryrequirements,raisingthelevelofambitionforfleetelectrification–includingleasing4.2.6CHANGESINTARGETEDcompaniesandotherfleetmanagers,alsoalignwellREGULATORYREQUIREMENTSFORwithbettercapacityfororganizationalfleetplanningSPECIFICUSAGEPROFILESdecisionsandgreaterrelevanceoftotalcostofownershipandlifecycleemissions,aswellasgrowingMorestringentenvironmentalregulations(i.e.,considerationplacedonenvironmental,socialandvehicleefficiencyorCO2standards,andlocalgovernance(ESG)goals,asthebasisforinvestmentpollutantemissionsstandards,aswellasspecificdecisionsbyfleetoperators(Daina,2023).requirementstotransitionvehiclestowardsEVs)forhighlyutilizedvehiclescanpromoteefficientuseThedifferentiationofenvironmentalregulatoryofmineralsforEVbatteriesandmayalsogeneraterequirementsbasedonfootprintasamodulatingpositivespilloversintermsofequity.parameter(asdiscussedinSection4.2.3)orsafetyregulationsbasedonweight(asdiscussedinsectionInthecaseofminerals,theadvantagecomesfrom4.2.4)isalsoapplicable,inprinciple,tothecasethefactthatEVsthataremoreintensivelyusedofhighlyutilizedvehicles.TherationalbasisfordisplacemoreGHGemissionsandoildemandthischoiceliesinthefasterreturnonthecapitaleachyearperunitbatterycapacity.Examplesinvestment(pricepremium)forelectricorotherwiseincludetaxisandsharedmobilityservicesaswellmorefuel-efficientvehiclesthatrequiregreaterasmunicipalserviceandpostalfleets,whichareamountsofenergyfortheiroperationsandthataredrivenhighercumulativelifetimedistancesthanmorefrequentlyintraffic.Morestringentregulatoryprivatecars(MorfeldtandJohansson,2022).48Inrequirementsforlargerandheaviervehiclescouldalsomakesmallerandlightervehiclescomparativelymoreaffordable,therebyreorientingconsumerchoicestowardsthem.43TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION44DifferentiatedregulationsbasedonweightandCarpenterandAntich,2022).57ThishasadverseTABLE8:Vehicletaxationframeworksinselectedcountriesandregionsfootprintarelikelyeasiertoimplementatthelocalequityimplications,ascorporationsaremoreablelevel.Oneexampleisgivenbyfootprint-specifictowithstandahighertaxburdenontheirbalanceCountryorregionFueleconomy/CO2/GHGandpollutantemissionsstandardsaccessorparkingrestrictionsinselectedurbansheetcomparedtomanyprivatehouseholds,ASEANareas,suchascentraldistricts(ITF,2023).Thisisespeciallyinlower-incomecountries(CarpenterandChinaIntheAssociationofSoutheastAsianNations(ASEAN),Singaporeadopteddifferentiatedtaxation,basedonthealsojustifiedbyconstraintsrelatedwiththelimitedAntich,2022).environmentalperformanceofvehicles,starting2012.DifferentiatedvehicletaxesbasedonCO2emissions/kmavailabilityofstreetspace.51EuropearealsoinplaceinIndonesia(intheformofaluxurytaxthatusesenginesizeasadiscriminatingparameter)andVehicleregistrationtaxesalsotendtobehigherinThailand.Malaysiaappliesdifferentiatedvehicleexcisetaxesbasedonenginesize.ThePhilippinesdifferentiates4.3VEHICLETAXATIONcountriesthatdonothaveavehiclemanufacturingIndiavehicletaxesbasedonvehicleprice.industry,generatinglargerrevenuestreamsforJapan4.3.1COUNTRY-LEVELTAXATIONgovernmentsthanincasesofcountriesthataremajorLatinAmericaChinaappliesvehiclepurchasetaxes,allowingreductionsforqualifiedenergy-savingvehiclesandexemptingEVsFRAMEWORKSvehicleproducers(CarpenterandAntich,2022).UnitedStatesandfuelcellelectricvehicles(FCEVs).VehiclesaresubjecttodifferenttypesoftaxesandThedesignofvehicletaxationschemesalsohasTaxesaredifferentiatedbasedonenginepower(Austria,Bulgaria,Croatia,Italy–alsodifferentiatingbypowertrainfees(oracombinationoffeesandsubsidies,inimplicationsforgovernmentrevenues.Revenue-type–andSpain)capacity(Belgium,CzechRepublic,Hungary,Romania),CO2emissions/km(Cyprus,Luxembourg,feebatesorbonus/malusschemes)applicableatneutralfeebatesorbonus/malusschemesarebetterandSweden–alsodifferentiatingbypowertraintype).Denmark,Finland,theNetherlandscombineweightandthecountrylevel,generallyappliedatthetimeofsuited,fromanequityperspective,forcountrieswithCO2emissions/kmasmodulatingparametersforvehicletaxes.FrancecombinesCO2emissions/km,weight(frompurchaseofvehicles(e.g.,asregistrationorvaluehigherincomesandstrongcardependency(since2022),andpower.From2023,FrancewillalsomandateaceilingonEVmanufacturingemissionsforEVstoqualifyaddedtaxes)and/orduringvehiclelife(intheformlowerincomehouseholdshavefeweralternativesforsubsidies.Germany,Greece,Ireland,andPortugalcombineCO2emissions/kmandenginecapacity.Latviausesofannualcirculation/ownershipchargesorrecurrenttocarownershiptoaccessmobility).Revenue-weight,enginecapacity,andpower.EVsandFCEVsareoftenexemptedfromorsubjecttotaxationadvantages:e.g.,fees,possiblyincludingparkingandemissionsgeneratingframeworksaremorelikelytohaveinAustria,Belgium,Cyprus,CzechRepublic,Denmark,France,Germany,Ireland,Italy,Latvia,Luxembourg,Poland,certifications).lowerequitychallengesinemergingeconomies,58Romania,Slovakia,Slovenia,Spain,andSweden.especiallyifuniversalaccesstomobilityisensuredVehicletaxationcanbedifferentiatedbasedwithgreaterinvestmentsinpublictransport.IndiaapplieslowertaxratesforEVsandFCEVsandalsodifferentiatestaxratesbetweencarsandSUVs,penalizingondifferentpossiblecriteria.Theparametersthelatter.currentlyusedbygovernmentsasdiscriminantsforVehiclecirculation/ownershiptaxesareuseddifferentiatedtaxationincludeenergyefficiency,insomecountriestoencouragemorefrequentTaxationfavouredtheadoptionofsmallercarsforalongtimeinJapan,where“Kei-cars”benefitedfromtaxdiversification,security,GHGandpollutantvehiclerenewal,especiallywhentheyaredesignedexemptionssincetheirdesignationasthesmallestvehiclesegmentinJapan,resultinginmajorcontributorstotheemissions.52Otherdiscriminatingparametersincludesuchthatchargesincreaseovertime.Thiscanconsistentlyhighmarketsharesofthesevehiclesinthecountry.Additionally,localpoliciesexemptKei-carsfromenginecapacity(mostcommonlyforframeworksbebeneficialfromanenvironmentalandsafetytherequirementthatappliestoallotherprivatecarstoowna“garagecertificate”–adedicatedparkingspotpermit.setupbeforetheEVtransitionandtheadoptionofperspective,aslongasvehicleperformanceonHowever,likeallcars,theyarenotallowedtouseon-streetparkingovernight.downsizingasanenergyefficiencymeasure),power,thesemetricsisimproving.Animportantlimitationandprice53(CarpenterandAntich,2022).ofthisapproach,particularlyincar-centrichigh-Brazilappliesvehicleregistrationtaxes,includingexemptionsforEVs.Colombiahasdifferentiatedtaxationbasedincomecountries,isthatcirculationtaxescomeonLDVcategories,withhighertaxratesformoreexpensivevehiclesandincentivesforEVs.ElSalvadorhastaxForICEVs,allthesediscriminatingcriteriacanhavewithequitychallengesforcapital-constrainedincentivesforEVs(BEVsandPHEVs).Mexicoappliestaxratesbasedonvehiclepriceswithincentivesorexemptionsimpactsonbothweightandequity,asenergyuse,householdsandbusinesses,whooftenrelyonattheFederalandStatelevelforEVs.PeruandUruguayalsoapplytaxexemptionsforelectricandhybridvehicles.CO2emissionsandpoweralltendtobecorrelatedsecond-handcars.Similarconsiderationsalsoapplywithweightandprices(IEA,2019a).ForEVs,theforlow-andmedium-incomecountries,wherecarVehicleregistrationtaxesareappliedattheFederallevel,andsoaretaxcreditsforEVsandFCEVs.ComplementarydecouplingbetweenGHGemissionsandpricesbuyersalsorely,toalargedegree,onsecond-handmeasures,includingtaxesandexemptionsforenergysavingvehicles,EVsandFCEVsareappliedattheStatelevel–canleadtoequity-relatedchallenges,54requiringvehicleimports.e.g.,viatheCleanVehicleRebatePrograminCalifornia.correctiveredistributionalmeasures.4.3.2KEYEXAMPLESOFCOUNTRY-Sources:NEASingapore,2022;ITF,2022;PWC,2022;electrive,2023;ACEA,2022;LipscyandSchipper,2013;ParkingReformAtlas,2021;EnsuringthatdifferentiatedtaxationiseffectiveinWIDEDIFFERENTIATEDVEHICLEUNEPetal.,2020;OECD,2020;IRS,2023;CaliforniaSalesTaxHandbook,n.d.;CaliforniaARB,n.d..fosteringprogressonenergyefficiencyandCO2REGISTRATIONTAXESemissionsrequiresthattheseparametersbecomesecond-handusedvehicles.InNewZealand,where4.3.3VEHICLETAXATIONRELATEDkeydeterminantsofwhatdefinesthedifferentiatedTheuseofdifferentiatedtaxesonvehicleacquisitionsecondhandimportsarethevastmajorityoftheWITHINTERNATIONALTRADEtaxation.55Asinthecaseofregulations,itisalsoiscurrentlycommoninmostcountries.Thisisthenewlyregisteredvehicles,theCleanCarDiscountcriticalthatdifferentiatedtaxationtakesintocasefortaxesappliedtohouseholds(summarizedexpandedearlierrebatesforBEVsandPHEVsintoTrade-relatedtaxationpolicies,inparticulardutiesconsiderationlifecycleperformance.56forselectedcountriesandregionsinTable8)and,arevenue-neutralfeebateorbonus/malusschemeappliedtoimports,can,likeproductionincentives,increasingly,alsofortaxationframeworksappliedto(NewZealandTransportAgency,2023).Thecontributetotheorientationofconsumers’choicesAsageneralrule,registrationtaxesaresubstantiallybusinesses(Harding,2014;CarpenterandAntich,programhasuniquefeaturesglobally,asitappliesandindustryinvestments,insofarastheyeffectivelyhigherthancirculation/ownershiptaxes,also2022andEuropeanEnvironmentAgency,2022).differentrebateandfeecurvesfornewversususedalterproductprices.Tradepoliciesarealsocloselybecausethelatterhavearecurrentnature.vehicles(withrebatesandfeesforusedvehiclesrelatedwithinternationaltaxationregimesincluding,inCompanycarsalsotendtobesubjecttolowerRegistrationtaxesaremostfrequentlyappliedtonewbeingabouthalfthoseappliedtonewvehicles).Theparticular,rulesandinstrumentsthatweredevelopedtaxationratesthanprivatevehicles(Harding,2014;vehiclesorusedvehicleimports.Inspecificcases,pairingofthisdifferentiatedvehicletaxationwithundertheframeworkoftheWorldTradeOrganization.59includingFranceandNewZealand,theyalsoapplytoNewZealand’sCleanCarStandard(discussedinSection4.1.3)isespeciallyinteresting,asitistheonlyTheWTOframeworkattemptstopromoteopencaseofcoherentlydevelopedregulatoryandtaxationtradeandavoidprotectionism,whileallowingformechanismsapplicabletobothnewandsecond-specialprovisionsandflexibilityfordevelopinghandimportsaimingtoaddressbothCO2emissionscountries.Itallowsfortheapplicationofduties,andtheEVtransition.45TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION46followingspecificprocedures.Relevantagreementssignificanttrade-relatedtensionsacrosstheworld.4.4CHANGESINsubsidiesorpreferentialtaxationtoregulatoryregimesincludeoneonSubsidiesandCountervailingDomesticsubsidiesandtariffsarebeingformulatedVEHICLETAXESTOthatrecognizetheneedtoaddresstheexternalitiesofMeasures(SCM)(WTO,n.d.a)andtheGeneralinconsiderationofprospectsforcontinuedEVADDRESSVEHICLEEVs,andtocollectrevenuestomaintaininfrastructure.AgreementonTariffsandTrade(GATT)(WTO,marketgrowthandalsoinlightofthescaleofWEIGHTINCREASESn.d.b).TheseplaceconstraintsontheuseoftheindustrialtransitionneededtodecarboniseANDEQUITY-RELATEDInJapan,fiscaladvantagesforKei-cars60weredeployedsubsidiesbutdonotbanthemoutright,excepttransportandenergy.Tensionsaredriven,aboveall,CHALLENGESwiththeaimtolimitenergyuse,ratherthanvehicleiftheyarecontingentuponexportperformancebytheextensiveusebydifferentmarketplayersof(orbattery61)weight.ThisisbecauseJapanisfullyorlocal-contentrequirements(WuandSalzman,measuressupportingthescaleupofEVs,automotive4.4.1CHANGESINCOUNTRY-LEVELreliantonfossilenergyimports,andthisreliancealso2014).Otherwise,subsidiesarepermissibleunderbatteries,andrelatedsupplychains–includingTAXATIONFRAMEWORKShadnegativeimpactsonitstradebalance.However,WTOlawaslongastheydonotnegativelyharmthesupportschemesbasedondomesticcontent(CSIS,increasedconsiderationofbatterymaterialsascriticaltradeinterestsofothercountries,meaningthata2022),asthesearenotalignedwithWTOrules.EvidenceavailablefromChapters2and3showscommoditiesshedsnewlightontheJapaneseKei-cargovernmentmaytakeunilateralactionsindomesticThesemayhavestrongimplicationsonthewaytheimportanceofintroducingorrefiningelementspolicies:similarinstrumentscouldbeworthseriousadministrativecourtsagainstanothergovernment’sdutiesapplicabletocarsandothertransportvehiclesrelatedwithweight,footprint,materialrequirementsconsideration,especiallyincircumstanceswherethesubsidyifitfindsthatthesubsidycausesorthreatenswilldevelop.KeyexamplesofcontroversialmeasuresandequitytothecriteriaalreadyusedfortheavailabilityofbatterymaterialsisconstrainedandinmaterialinjurytoanestablisheddomesticindustryincludethecaseoftheNewEnergyVehicleSubsidydeterminationofvehicletaxation.Doingthiscancountriesthatdonothaveaccesstothenecessary(WuandSalzman,2014).Programme,whichcametoanendinChinainbeinstrumentalinsteeringconsumerdemandandresources,domesticallyorviatheirtradepartners.2022butmaystillbecomplementedbysupportiveindustryinvestmentsawayfromthecontinuedTheWTOagreementsalsoallowforotherpoliciesatthelocallevel—leadingtoamovebytheincreaseinvehiclesizeandweight,mitigatingtheNorway,thecountrythatisbyfarthegloballeaderinexceptionstoGATT,includingtheneednottoEuropeanUniontoinvestigatefurther(AizhuandnegativeeffectsoftheSUVshift,managingthosetransitioningtoelectriclight-dutyvehicles–at88%discriminatebetween“like”productsanddomesticBlenkinsop,2023;EuropeanUnion,2023d)andtheofEVsinareaswheretheyfacegreatercriticalities,marketsharein2022(IEA,2023b)–hassince1995andforeignproducts(WTO,n.d.candWTO,InflationReductionActintheUnitedStates,whichandultimatelyreducingrisksofassetstrandingleviedapurchasetaxonICEVvehiclesthatisbasedonn.d.d).Themostrelevantinthecontextofvehicleincludescountry-specificprovisions(USCongress,fromgovernmentalactiontofosterclimatechangevehicleweight,CO2andNOxemissions.TheweighttaxtraderelatewithArticleXXoftheGATT(WTO,2022;USTreasury,2023).mitigationandsustainability.appliestocarsabove500kg,andincreaseslinearly,n.d.e).Thisrecognizesthattheprotectionofwiththetaxperkgincreasingabove1,200kgandtheenvironmentincludingnaturalresourcesisa4.3.4LOCALVEHICLETAXESANDPoliciesalreadydeployedinsomecountriesofferagainabove1,500kg.TheCO2emissionstaxcurvelegitimateobjectofgovernments.CHARGESimportantexamplesoftaxationandpricingreformsincreasesatregularintervalsaswell,andvehiclescapableofbetteraddressingchallengesrelatedwithwithCO2emissionsbelowacertainvalueareawardedAutomobileemissionstandardsaimingtoprotectairTheapplicationofchargesandtaxesisalsopossibletrendstowardsvehicleweightandsizeincreasesdeductionstothetax(althoughtheminimumtaxis0;qualityandreduceGHGemissionsarewellsuitedatthelocallevel,anditiscommonpracticeinsomeandelectrification.Theycanalsoinformstrategiesi.e.,consumersdonotreceiveasubsidyortaxrebate).tocomplywiththeArticleXXexceptiontonationalcities.MeasuresinthiscategoryincludeparkingtotransitionfromincentivizingEVadoptionthroughStartingin2023,Norwaydiscontinueditsexemptiontreatment.Precedentforthisexists:inthespecificandaccessfees(i.e.,congestionorcordonpricing),ofelectricvehicleswithastickerpriceexceedingNOKcaseofgasguzzlertaxesappliedintheUnitedStates,limitedtospecificurbandistrictsorapplicable500,000(aboutUSD46,000)fromVAT.AtthesamedifferentiatedtaxationforvehicleswithhigherGHGacrosslargerurbanareas.Thesepoliciesoftenhavetime,itaddedanadditionalfeeonvehicleimportsemissionswasalsodeemedinlinewithWTOrulessystemicimpactscapableofenhancingenergy(includingallEVsandusedvehicles)basedonweight(WTO,1994).Akeyaspectofthealignmentistheefficiencyandreducingenvironmentalimpacts—(TollCustomsNorway,2023).Whiletheannouncedrequirementthattheapplicationofconditionsnote.g.,bystimulatingshiftsinmodalmixestowardschangeinthetaxregimeledtoaspikeinICEVandBEVdifferbasedonthecountryoforigin.non-motorizedorpublictransport(andmorerecentlysalesinDecember2022,withsalesofmorethan2.5alsotosharedmobilityservices).timestheDecember2021volumes(Holland,2023),TradedutiesregardingcarsandothertransportvehicleslongertermimpactsaremorelikelytoleadtoincreasedarecurrentlyappliedinternationallyonthebasisofInsomecases,theyalreadyintegrateadditionalproductdiversificationforEVs,awayfromheavydifferentframeworks.Thesespanfromfullexemptionsincentivestosupportthesamegoalsthroughvehicles(andbatteries).fromanyduty,asinthecaseoffree-tradeagreements,technologyshifts,asinthecaseoftargetedtotheapplicationofarangeofdifferentdutyrates,exemptionsordifferentiatedchargesbasedoninothercases.Importleviesdifferentiatedbasedonpollutantand/orCO2emissionlevels.Themostenvironmentalreasonsalsoexist–e.g.,SouthAfricaiconicareprobablythecasesofurbanaccess(PWC,2022)–andtherearecaseswherespecificchargesinplaceinselectedcitiesglobally,includingexemptions(sometimesconditionaltoprices)orLondon,Milan,StockholmandSingapore,alsoreductionshavebeenappliedforEVs(e.g.,Argentina,intendedtomanageefficientlytheuseofscarceroadArmenia,Colombia,Ecuador,Indonesia,Paraguay,space(ITF,2021a).Philippines,RwandaandThailand)(PWC,2022;IEA,2020;GlobalTradeAlert,2022;GEF2021;Randall,Differentiatedlocaltaxesandchargesbasedon2022;TrendsInAfrica,2023;UNEPetal.,2020).vehicleweightandfootprintarenotcommonbutpioneeringinitiativesarestartingtoarise.TheseareRecentdevelopmentsregardingtradeandtariffsofdiscussedinsection4.4.3.criticalmaterials,batteries,andEVsareleadingto47TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION48France’sbonus/malusfeebateschemewasrevisedresourcedepletionandroadsafetyconcerns,while4.4.3CHANGESINLOCALVEHICLEGrenobleisexpectedtoadoptasimilarmeasureinin2022tolevyadditionaltaxesonheaviervehicles.alsoaccountingfortherelevanceofchangesinbatteryTAXESANDCHARGESthenearfuture.Vehiclesthatweighmorethan1,800kgaresubjecttoanchemistriestomanagematerialcriticalities),aswelladditionaltaxofEUR10/kg,withtheadditionalweightmorestringentrequirementsforactiveroadsafetyTaxesandchargesadoptedatthelocallevelcanRegardingequity-relatedchallenges,duetothetaxceilingatEUR50,000.However,BEVs,FCEVs,andfeaturesandprogressivityoftaxationwithpricealsobetailoredtospecificobjectivesassociatedSUVshiftandEVtransitionandtheapplicationofPHEVswithanall-electricrangehigherthan50kmincreases.withchallengesposedbyvehicleweightincreasesdifferentiatedchargesforlargevehiclesandICEVsareexempt(GovernmentofFrance,2023).Arecentandequity-relatedaspects.Higherparkingfeesforvs.EVs(butalsoregulatorymeasureslimitingproposalsuggestedtodefineaneligibilityscalefortheAscorporatecarscanaccountforlargesharesofnewlarger,heaviervehiclesadoptedinParisandothercirculationforICEVs,andinparticularlow-andzero-Frenchbonus/malus(stilldependentongCO2/km),vehicleregistrations—andarethemajorityinahigh-Frenchcities,startingin2024,arerecentprominentemissionzones),recentanalysisdevelopedinFrancemodulatedonthebasisofsizeorweightofthevehicle,incomeareasliketheEuropeanUnion(Carpenterandexamplesofdifferentiatedfeesbasedonvehicleflaggedtheimportanceoftargetedreliefmeasuresratherthanbasedonitsprice,orbycrossingweightAntich,2022),likelymorethanthatinmedium-andweight,currentlyrepresentingbestpracticeglobally.accompanyinglow-incomehouseholds,especiallyinandsize(RobinetandGérardin,2022).Theideafollowslow-incomecountries—thesechangescanalsoprovidecasesoflimitedaccesstoalternativemodes,andinaanearlierproposal,alsoaimingtosupportconsumerawaytoincreasetheavailabilityofmoreaffordableandDifferentiatedfeeswillfirstberolledoutinthephasewhenlimitedvolumesofsecond-handEVsaredemandandvaluecreationforsmallerandlightersustainablesecond-handcars,includingEVs,forlower-fourcentralurbandistricts,takingintoaccountavailable64(RobinetandGérardin,2023).vehicles,helpingtomakeEVsavailableatlowerprices,incomehouseholdsandbusinesses.thevehiclesizeandweight,andenginetype(VilleminimizeCO2emissionscomparedtoICEvehicles,deParis,2023;Riposseau,2023;Willsher,2023;4.5FUELTAXATIONandalsocomparedwiththelifecycleemissionsof4.4.2CHANGESINVEHICLETAXATIONDow,2023andSergeev,2023).EVsmaybeexemptANDCARBONPRICESlargerEVs(Meilhan,2019).OtherbenefitsincludetheRELATEDWITHINTERNATIONALTRADEfromlargerfeesorbesubjecttodifferentweightpossibilitytolimitincreasesinpublicspendinglinkedtothresholds,aimingtoaccountforhigherweightforEfficientlevelsoftaxationonfossilfuelsusedinincentiveschemesbylimitingtheirapplicability.FurtherDecisionstakenattheWTOconsideredthattheuseofcomparablesizewithICEVs.Exemptionsarealsotransport,arecrucialfordiscouragingthedeploymentbenefitsareassociatedwithlowerpressureonresourcedifferentiatedtaxationbasedonprices(andthereforeforeseenforlargefamilies,low-incomefamilies,ofvehicleswithlargerweightandfootprint,andextractionrelatedwithEVbatterymaterials.alsoproductdifferentiationwithintheautomobileanddisableddrivers.FeesareexpectedtorangealsoforfosteringtheEVtransition,asshownincategory),includingforimports,isalignedwithWTOfromEUR15permonthforelectricvehiclestoChapter2.AfirstpriorityisremovingharmfulandOthervehicletaxationtoolsthatcanhelpdisincentiviserules,aslongasthedifferentiationisnotimplementedtriplethatforthelargestandheaviestICESUVs.Inunsustainablesubsidiesforfossilfuels,butefficientthepurchaseoflargerandheavierEVsandfavourthetoprotectthedomesticproductionofautomobilesFrance,Lyonhasalsoannouncedtheplantoadopttaxationshouldincludealsoother“external”costspurchaseofsmaller,moreefficientones,includescaling(WTO,1994).Thecomplianceofautomobileemissionasimilarparkingfeestructurefrom2024,andhasduetoenvironmentaldamage,congestion,crashes,downEVpurchaseincentivesproportionallytoenergystandardsaimingtoprotectairqualityandreducealreadyproposedafeestructurethatstartsatEURroaddamageandgeneralconsumptiontaxes(Parryconsumption(withadvantagesformoreenergyefficientGHGemissionswithWTOrules(byvirtueofArticle15permonthforallbutthelargestcarswithlow-etal.,2021).65TaxingfossilfuelsforroadtransportisEVs),andaddingapurchasetaxproportionaltoEVXXoftheGATT)alsoindicatesthat,inprinciple,thereemissionsstickers(Crit’Airvert);EUR30permonthalsocrucialtoavoidgivingacompetitiveadvantagetoenergyconsumption.arepossibilitiestoconsiderothercriteriaallowingtoforICEcarsfrom1000-1725kgandHEVsfromcarbon-intensiveoptions,whichrisklockinginGHGaddressenvironmentalchallengesinducedbyvehicle1000-1900kg;andEUR45permonthforICEVsandemissionsforlongperiodsoftime.Duetothevariabilityofmissionprofilesfordifferentweightincreases,suchasthoseassociatedwithmineralHEVsheavierthan1725and1900kg,respectively,vehicles,includinginparticularhighlyutilizedcarsandavailabilityrelatedwithEVbatteries.aswellasforcarswithlow-emissionstickersvansusedintaxiandcar-orridesharingservices(bothweighingmorethan2200kg(Riposseau,2023).ofwhicharemorelikelytoneedlargebatterypacksAsinthecaseofotherthemoregeneralconsiderationstofulfildailydrivingoperations),thereismeritintheontrade-relatedtaxes,developedinSection4.3.3,theconsiderationofdedicatedexceptions/rulesforthesetopicisthesubjectofsignificantgeopoliticaltensions.usecases(conditionaltoeffectiveuseofvehiclesforPartofthereasonliesinexportrestrictions,especiallytheseservices,e.g.,byrequiringminimumamountofincaseswheretheseareappliedtomaterialsforwhichkm/yeartoaccesstotaxrebates).California’sCleanamajorglobalsuppliercontrolshighsharesofoverallMilesStandard(GovernmentofCalifornia,2018),globalextractionandprocessing,andwhichserveaswhichrequiresthatridesourcingservicesreduceGHGkeyinputsfortheautomotiveEVandbatteryindustries,emissionsperpassengerkm,issynergisticallypairedalongwithotherstrategicsectors—withkeyexampleswithincentiveprogramsforashifttoEVs,isanexamplerelatingtopracticesappliedbyChina,forrareearthsofapolicycapableofdeliveringCO2cutsatlowercostsand,morerecently,graphite(WuandSalzman,2014,(RajagopalandPhadke,2019).EuropeanCommission,2023b).Regardingcorporatecars,equityconsiderationscallforThissuggeststhat,whilethereisthetechnicalexistingprivilegestobeeffectivelyremoved(Harding,possibilitytomakeprogressonchangesinvehicle2014;CarpenterandAntich,2022).Especiallyifpairedtaxationrelatedwithinternationaltradethatcouldwithanoverallupwardrevision,freeingupbudgethelpaddressingcriticalitiesflaggedinChapter3forredistributionalpurposes,62corporatecartaxes(namelyvehicleweightincreases,mineralavailability,canalsobebetterusedtofosteranalignmentwithandequityaspects),theirpracticalviabilitydependssustainabilityobjectives.63ThismaybeachievedbyupondevelopmentsintheeffectivenessofprocessesfactoringinstrongerdifferentiationsbasedonGHGfacilitatingdialogue,andonnegotiationstakingplaceatemissions(reversinglowerpurchasegrantsforEVstheintergovernmentallevel.inmanycountries),size,weightoracombinationofthese(integratingelementscapableofaddressing49TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION50SomeleveloffueltaxationisalreadyinplaceinmostwidenetzeroemissionsincludedintheClimateLaw4.6ALTERNATIVEinfrastructure,ataffordableelectricityprices,is—butnotall—countries,primarilyintheformof(EuropeanUnion,2021).ThisincludestheproductionENERGYeffectivelydeveloped.GovernmentsandOEMsshouldexciseandvalueaddedtaxes.66Differencesinexistingofkeymaterialsneededintheautomotivesector,INFRASTRUCTUREthereforecollaboratetospeedupthedevelopmentofataxationschemesacrosscountriesareinfluencedbytheinparticularaluminiumandsteel,aswellasother(EVCHARGERS)capillarycharginginfrastructurenetwork.historicalavailability(orlackthereof)ofoilresources,materialsnecessaryforroadtransportinfrastructurewithlowertaxratesgenerallyappliedincountrieswith(namelyiron,steel,andcement).TheanalysisinChapter3highlightsthefactthatTheAlternativeFuelsInfrastructureRegulationhigheroilreserves,resourcesanddomesticproduction,increasedEVsalesarebeingaccompaniedbyincreases(AFIR)oftheEuropeanUnionisthefirstexampleofaandhighertaxratesfornetoilimportingcountries.4.5.1ROADUSERCHARGESTOinbatterysize.ThisisduetopreferencesorientedregulatoryinstrumentthatrequirestheconstructionofAccordingtotheInternationalMonetaryFund,however,COMPLEMENTORPROGRESSIVELYtowardslong-rangevehicles,especiallyforwealthyaminimumnetworkofchargingandrefuellingstationsunder-pricingofroadfuelsispervasiveacrossmanyconsumers,achoicethatislikelytobeexacerbatedbyalongthetrans-Europeanroadnetwork,includingcountries,with70%ofglobalgasolineconsumptionREPLACEFUELTAXATIONlimitationsintheavailabilityofEVcharginginfrastructure.severalurbannodesand,asnationalplansarealsobeingpriced,in2021,atlessthan60%ofefficientfinalized,onothermajorroads,ineachMemberStatelevels67,and50%ofdieselfuelbeingpricedatlessthanRoaduserchargesareapolicysolutionthatoffersLargebatteriesforEVsareaninefficientuseofscarce(EuropeanUnion,2023g).halftheefficientlevel(Parryetal.,2021).thepotentialtomakeupforlostfuel-dutyrevenuesresources,especiallyforpersonalvehicles,astheyandadequatelypricevehicleoperations.OptingforarenotbeingdrivenforthevastmajorityofthetimeInaddition,awiderangeoftechnicalstandardsBeyondtaxationoftransportfuels,theadoptionofthissolutionwouldeffectivelyswitchthetaxbaseto(typicallytheyareparkedaround95%ofthetime).andotherregulatoryrequirementsarestillbeingeconomy-widecarbonpricingisparticularlyrelevantindistancetravelledratherthanenergyuse(ITF,2021b;Bottleneckslimitingtheavailabilityofmaterialsneedednegotiatedatthetimeofwriting,suchastheEnergycountriesthathavelimitedavailabilityoffossilenergy.OECD,2019b).tomanufacturebatteriesareexacerbatedbythesePerformanceofBuildingsDirective.TheDirectiveNotwithstandingchallengesrelatedtoincreasesinchoices,callingfordemand-sidemeasurestomitigateincludesprovisionsregardingelectricvehicles,fossilfuelpricesduetogeopoliticaltensions,carbonDistance-basedchargeseffectivelyapplythetheseissues(Box2).Policiesthatcanshiftsalestowardgroundedontheconsiderationthatcharginginpricingisessentialtomeetingobjectivesalignedwith‘polluterpays’principle,wherethosewhoproducesmallerEVs,incentivesbasedonactualelectricvkmrelationtobuildingsisparticularlyimportant,sinceclimateimperatives,includingaglobaltransitiontonetpollutionbearthecostsofthedamagetheyinflictforearlydeployment,andpromotingall-electricdrivingthisiswhereelectricvehiclesparkregularlyandforzeroemissions.Carbonpricesnotonlysupportshiftsonothersortheenvironment.Location-specificforPHEVs,69couldeffectivelydelivermorefossilfuellongperiodsoftime,slowchargingiseconomicalinconsumerchoicestowardslow-andzero-carbonandtime-dependentdistance-basedchargesdisplacementatlowercoststhanastrategypromotingandtheinstallationofrechargingpointsinprivatetechnologies,butalsoleveragetheresidualdemandforcouldprovideacost-effectivewaytoaddressfewerEVswithlargerbatteries.LargeEVbatteriesspacescanprovideenergystorageservicestothecarbon-intensivefuelstocollectgovernmentrevenues,congestion,whosecostsareparticularlyhighinalsoincreaseaveragevehiclecosts,thuslimitingthebuildingandintegrationofsmartchargingserviceswhichwillbecrucialtofinancingredistributivepoliciesurbanareasandatcertaintimesofday.ChargesEVtransition,anditsbenefits(lowertotalcostofandsystemintegrationservicesingeneral(Europeanduringtheenergytransition(anaspectthathasspecificcouldalsopotentiallybedifferentiatedtoincentivizeownership)tohighincomehouseholds.Commission,2021).Pre-cablingistobecometherelevanceforEVs,intransport,duetotheirhigherPHEVstodriveinall-electricmodeandtoreflectnormforallnewbuildingsandbuildingsundergoingupfrontcostandtheresultingequitychallenges).differentimpactsonstreetspaceoccupationandThevalue-addedoflong-rangeEVsforconsumersmajorrenovation,andbarrierstotheinstallationofroadsafetyrisksforvehicleswithdifferentsizes,islikelytodecreaseasaccesstoEVchargingrechargingpointsinresidentialbuildings,ensuringaOneofthebestpracticesregardingtheadoptionweightandsafetyfeatures,helpingtoaddressother“righttoplug”,needtoberemoved.Theseprovisionsofcarbonpricingforequity-relatedconsiderationsnegativeenvironmentalandsocialexternalitiesofhavebeenreinforcedinfollowingnegotiatingstepsisthecaseofthecreationofaSocialClimateFundroadtransport,inparticularemissionsoflocalairwithclearerreferencestobidirectionalcharging,andaccompanyingthecreationofaseparateEmissionspollutants,noiseandtrafficcrashes.Sinceelectrictheroleofe-bikesande-scootersintermsoftheTradingSystem(ETS),specificallydedicatedtoroadvehicleshavefewernegativeexternalitiesassociatedallocationofparkingspace,alsoinnon-residentialtransportandbuildings,intheEuropeanUnion,withfuelwithpollutantandGHGemissionsthanconventionalbuildings(EuropeanParliament,2023a).distributorsasregulatedentities.68Startingin2027,thisvehicles,userchargesapplyingtoEVswouldlikelybeinstrumentwillensurepricesignalspasstoconsumerslowerthanforcomparableICEVs(ITF,2021b).tostimulateinvestmentsinenergyefficiencyandenergydiversification(EuropeanParliament,2022Theshifttoroaduserchargesislikelytobecomplex,andEuropeanCouncil,2022).ItwillalsouserevenuessincegovernmentsneedtofindthebalancebetweengeneratedbytheETS—uptoamaximumamountstimulatinginnovationandthetechnologytransition,ofEUR65billion(EuropeanParliament,2022andwhilealsoaddressingtheissueofrevenueshortfallsEuropeanCouncil,2022)—tosupportSocialClimate(althoughcarbonpricingcanmitigatethis,atleastforPlansmeanttoaddresstheimpactofcarbonpricingonsometime,butnotwithoutchallenges,particularlyvulnerablehouseholds,microenterprisesandvulnerableinthecontextofincreasingoilprices).Moreover,transportusers.EUMemberStateswillberequiredtoroaduserchargeswillbeneededtorestrainpotentialcontributeatleastto25%oftheestimatedtotalcostsincreasesinvehicleusedrivenbythelowertraveloftheirPlans.costsofEVs,whilemaintainingincentivestoswitchtoEVsandlimitingsocialequityimpacts.ThiscomplexityInEurope,thereformoftheETS(EuropeanUnion,callsforagradualshift,aswellastheestablishmentof2023e),pairedwiththeintroductionofaCarbonasolidtechnologicalbasisformanagingthetransition,BorderAdjustmentMechanism(CBAM)(EuropeanalongwithclearcommunicationbetweenstakeholdersUnion,2023f),arealsoinstrumentaltosupportingthe(includingindividualsthatwilladoptEVs)thatwillbetransitionoftheindustrysectortowardstechnologiesaffectedbythechange(ITF,2021b).thatarecompatiblewiththeachievementofeconomy-51TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION52Othermajorinitiativesenablingawidespreadminimumregulatoryrequirements.70Publicrevenue4.7SUSTAINABLEreserves(wheregovernmentskeepcashdepositsdevelopmentofEVchargershavealsobeenundertaken,haseffectivelybeenallocatedforthispurposeinmajorFINANCEANDtomakeinterestandprincipalpaymentsincaseaovertheyears,inmajorEVeconomies,includingChinainitiativesliketheNextGenerationEUinstrumentDEVELOPMENTAIDprivateborrowerfailstomakescheduledpayments),(withmajorinvestmentsovertheyearsbyitsState(European,Commission,2023c)inEuropeandtheFUNDINGgovernment-heldsubordinateddebt(whereapublicGridCorporation)andtheUnitedStates.InthecaseofbipartisanInfrastructureLawintheUnitedStatesagencyagreestotakeonalowerprioritypositiontheUnitedStates,thesehavesignificantlyaccelerated(DOT,n.d.).SimilarconsiderationsalsoapplytogridSustainablefinanceframeworksareimportanttohelpfordebtrepaymentthanseniordebtholders),creditthankstoactivitiesandfundsdisbursedbytheJointreinforcements,includingwithinterconnectors,toachievingabetteralignmentbetweenthedecisionsinsuranceproductsforbondfinancing(consistingOfficeofEnergyandTransportation,establishedbytheenhancethereliabilityandtheprofitabilityofvariabletakenbyinvestors,corporationsandotherentitiesofgovernmentinsuranceagreeingtomakebondBipartisanInfrastructureLawof2021(USDOT,n.d.)renewableelectricitygeneration.withtheneedsdictatedbyrisks(includingthosepaymentsincasetheissuerdefaults),publicloansandrepresentingamodernizedinter-agencyapproach,posedtothefinancialsystem)associatedwithclimateandloanguarantees(enablingactasaguarantorbringingtogetherexpertisefromtheDepartmentsReformsinelectricitymarketdesigns—suchasthechange,biodiversitylossandotherenvironmentalfortheprivatesectortoobtainamarketloanwithofEnergyandTransporttosupportthedeploymentonedevelopedintheEuropeanUnion(Europeanconsequencesofeconomicandindustrialactivities.alowerinterestrate),grantsandco-investmentofzero-emission,convenient,accessible,equitableCommission,2023d)andpreviousEUreforms—areTheseincludeinstrumentsthatensuretransparentarealsoimportanttocomplementothermeasurestransportationinfrastructure(JointOffice,n.d.).notonlyessentialincaseswheretheexistingstructurereportingandfinancialdisclosuresofexposure(suchasadvancemarketcommitments,e.g.,linkedisbeingchallengedbygeopoliticalcircumstances,buttotheserisks.Theyalsoincludeframeworksthatwithpublicprocurement)thathelptode-riskprivatePublicsupport,leveragingrevenuesfromcarbonalsohelpfultoenabletoextractvaluefromtheeffectivehelpsteeringinvestmentstowardslow-carbonandinvestmentsneededfortheindustrialtransformationtaxationanddebt-driveninvestmentsforinfrastructuremanagementofEVcharging,includingviademand-sidecleansolutions,thankstotheclearidentificationofthataccompaniestheEVtransition.deployment(includingfundsthatbecameavailableinflexibilitymechanisms(BasharAnwaretal.,2022).sustainability-alignedassets.thecontextofCovid-19responsepackagefollowingThiscaneffectivelysupporttheuseofEVsandrelatedOtherinitiativesarealsoimportanttobetteraligntheCovid-19pandemic)canalsobeeffectivetocharginginfrastructureasassetsprovidinggridservices,Keyinstrumentsbelongingtothiscategoryofpolicytheneedsforatechnologicaltransitionandequity-supportprivateinvestmentsinEVchargers,beyondratherthanasliabilitiesfortheelectricitysystems.toolsincludetheTaxonomyRegulationdevelopedrelatedaspects.TheseincludethedevelopmentofintheEuropeanUnionintherecentpast,andainstrumentsfacilitatingaccesstoEVsforcapital-numberofsimilarinitiativesbeingundertakeninconstrainedhouseholdsandsmallbusinesses.Oneothergeographies.Theseincludespecificreferencesexampleisthemicro-creditmechanismdevelopedtosustainability-alignedvehicles,components/parts,inFrance,targetingentitieslackingaccesstocreditincludingEVs,andalsocovercharginginfrastructure.fromconventionalfinancialinstitutesandincludinga50%guaranteebythegovernment(GovernmentofTheirdevelopmentcanensurethatcostsofFrance,2021).borrowingforsustainability-alignedassetsissubjecttolowerratesofinterestincomparisonwithotherIntheinternationalcontext,initiativesfavouringproductsandserveasacorrectivemechanismaccesstocapitalatlowercostarecrucialtohelpincasesofmisalignedresponsibilityinthelow-andmedium-incomecountriestoseizesocializationofcostsduetoenvironmentalimpacts.opportunitiestoacceleratetheirtransitiontoEVs.ThiscanbeenabledbythepossibilityforMultilateralCurrenttaxonomies,whenconsideringtheDevelopmentBanks(MDBs)toborrow(andautomotivesector,tendtobeprimarilyfocusedonthereforealsolend)andatveryfavourableterms,iftailpipeemissionsofCO2.Whilelifecycleaccountingthispossibilityisfocusedonprojectscharacterizedcanbeeffectivelyaccountedforbyotherprovisions,withabetteralignmentwiththeSDGs(Cazzolae.g.,intheenergytransformationandindustryandSantosAlfageme,2023).Thedevelopmentsectors,existingframeworksgiveverylimited—ifofaninternationallyagreed,science-basedany—considerationtoweight-relatedattributesinternationalclassificationsystem(ataxonomy,ofvehicles.AbetterintegrationoftheseaspectssimilartotheonementionedabovefortheEU)iscaneffectivelyaddressriskmitigationgoalsofalikelyprerequisitetoenablethisdevelopment.theseframeworks,insimilarfashiontothecaseTheintegrationofEVs(especiallyifqualifiedofinvestmentsinlessenergyintensivemodesofbasedonconsiderationsrelatedwithintensityoftransportwithrespecttopassengercarsandLCVs.useandbatterysize),batterymaterialextractionFinancialmechanisms,includingdebtservice(subjecttoothersustainabilityandduediligencerequirements)andbatteryrecyclingfacilitiesintosuchataxonomyareallinlinewiththeobjectivestoensureagreatersustainabilityofthevaluechain,tocontributetomoreequitableinvestmentsforindustrialdevelopment,tofostertheEVtransitionintheGlobalSouth,andalsotoaddressweight-relatedchallengesdiscussedinthisreport.53TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION54ANNEX:TABLEA1:CountrycoveragebydatasourceandregionalgroupingMETHODOLOGICALNOTECountryGFEI_0715IEA_19MarklinesEEAArgentinaxxxAustraliaxxxBelarusxBrazilxxxCanadaxxxChilexxxThiseditionoftheGFEIbenchmarkingreportmarksThedatahavevaryinglevelsofgranularity,withdataforChinaxxxachangeinthedataandmethodologyusedtoobtainmostmajorcarmarketsbeingatthemodel-trimlevel.theresults.PreviousiterationsoftheGFEIreportusedColombiaxmodel-levelsalesandtechnicalcharacteristicsforall•Vehiclecharacteristicsinclude:size(wheelbase,includedcountries;thisdatawasthenaggregatedatawidth,height),weight(grossweight,kerbweight),EEAcountriesxxxxcountryandgloballeveltoassesstheprogressofnewengine(displacement,power),powertrain,vehiclespecificenergyconsumption.Thisiterationofsegment,price.EgyptxxxtheGFEIreportdiffersintworespects:•Vehiclesegmentsare:SmallCar,MediumIndiaxxxa.ThesourceofcoresalesdatachangedfromaCar,LargeCar,SmallSUV,LargeSUV,Lightproviderthatgivesmodel-level(andforsomeCommercialVehicleIndonesiaxxxcountries,trim-level)data—includingtechnicalspecificationssuchasfuelandpowertraintype,•Powertrains:Diesel,Petrol,LPG,CNG,Hybrid,Israelxvehicleweight,footprint,enginecapacity,andBatteryElectric,Plug-inHybrid,FuelCellElectricmore—toanotherproviderthatprovidessegmentJapanxxxleveldatawithoutdetailedvehicletechnicalA.1.2GFEI2021DATA,IEA_19specifications,andwithlessgranulardesignationKazakhstanxofpowertrains(i.e.ICE,mildhybrid,hybrid,plug-inThesearethedatamadepubliclyavailableonthehybrid,batteryelectric,andfuelcellelectric).onlineGFEI2021DataExplorerbytheIEAwiththeKoreaxxx2021versionoftheGFEIreport(IEA,2021a).b.Inswitchingdataproviders,boththeresolutionandKuwaitxcountrycoveragehavechanged.InothertoensureThisdatasetcontainsinformationforthesamesetofconsistencyacrossdatasources,vehiclesegmentcountriesasthoseincludedintheGFEI_0517data,andMalaysiaxxxdefinitionswerestandardised,bothbetweendatathedataunderlyingtheanalysisareorganizedaccordingsourcesandacrosscountries).tothesamesegmentandpowertraincategories.MexicoxxxThissectiondescribesthreeelementsoftherenewedThepubliclyavailabledatareportedintheDataMyanmarxmethodology.Itfirstoutlinesthedatasourcesused,Explorerareaggregatedoutputdata,notthehigh-thendescribesthekeydataprocessingstepsthatwereresolutioninputdatausedtodevelopthatreport.ThisNewZealandxxxcarriedout,andconcludesbyexplainingthenewWLTPmeansthattheresultsareonlyavailableatforbroadconversionfactorsapplied.categories,namely:NorthMacedoniaxA.1DESCRIPTIONOF•fuelconsumptionbycountry,powertrain,andyearOmanxDATASOURCES•fuelconsumptionbycountry,segment,andyear•footprintbycountryandyear,PakistanxA.1.1FUELECONOMYINMAJORCAR•weightbycountryandyear.MARKETS(2005-2017)DATA,GFEI_0517PeruxxA.1.3AUTOMOTIVESALESDATAFROMThesearethedataunderpinningtheGFEIWorkingMARKLINESPhilippinesxxxPaper19,publishedin2019(IEA,2019a).MarklinesisaproviderofautomotiveindustryPuertoRicoxintelligence,includingsalesvolumes,forawiderangeofcountries,asshowninTableA1.VehiclesalesareRussiaxxxcategorizedbyType,Segment,andPowertrain.TheSaudiArabiaxSingaporexSouthAfricaxxxSwitzerlandxxxTaiwanxThailandxxxTurkeyxxxUnitedArabEmiratesxUkrainexxxUnitedKingdomxxxUnitedStatesxxxUruguayXUzbekistanxVietnamxNote:TableA1alsoprovidesinformationondataavailabilityfromotherdatasourcesusedinthisassessment.55TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION56datadownloadextendsfrom2005to2022.OverHarmonisetheMarklinesvehiclesegmentationTABLEA2:MappingfromGFEI/IEA_19segmenttoMarklinessegmentMarklinesSegmentthisperiodtherearevaryingdegreesofgranularitynamingtowhatisusedintheIEA_19data,basedonAforthedatawithinineachcountry.ThismeansthatthematchingapproachshowninTableA2.GFEISegmentBforagivencountry,modelleveldatamightonlybeSmallcarCavailableforcertainyearsandnotforothers.WhenA.2.2PREPARINGIEASPECIFICENERGYDmodelleveldataismissing,regionalaveragesareCONSUMPTIONDATAMediumcarusedtofillthegaps.LargecarMPVTheIEAspecificenergyconsumptiondataisonlyEA.1.4CO2EMISSIONSFROMCARSANDavailableattheaggregatedlevelforcountry-SmallSUVFVANS,EEA,EEApowertrain-yearandcountry-segment-yearcombinations.Thesedatawerecombined:SECofLargeSUVSUV-AThisdatasetincludesregistrationsofnewvehicleseachcountry-segmentcombinationwasscaleduporSUV-BatamodellevelintheEuropeanEconomicArea(thedowndependingonthepowertrain.SUV-CEuropeanUnionplusNorway,Switzerland,andIceland).SUV-DThepowertrainscalingfactorsdependontherelativeSUV-EVehiclecharacteristicsinclude:size(wheelbase,width,SECofeachpowertrain(e.g.,hybridvehiclesconsumePickupTruckheight),weight(grossweight,kerbweight),engine20%lessenergythanconventionalgasoline,allelse(displacement,power),andpowertrain.Thesedatabeingequal)andonthepowertrainmixwithineachTABLEA3:CO2emissionsperunitvolumeofdifferentfuelsweredownloadedfrom2017to2022(withthe2022country-segmentcombinationin2019.databeingprovisional),fromtheEEAdatahub(EEA,EEAfueltypeCarboncontent(kgCO2/Lge)2023a;EEA,2023b).TheGFEI_0517datafedtheinformationunderpinning2.32thepowertrainscalingfactors.Thefinalresultisapetrol2.32A.2DESCRIPTIONOFdatasetofcountry-powertrain-segmenttimeseriespetrol/electric2.32DATAPROCESSINGofsec.e852.48STEPSdiesel2.48A.2.3PREPARINGEEADATAdiesel/electric1.88Theaimofthedataprocessingistouseallng2.1availabledatasetstoprovideanupdatetotheGFEIThespecificenergyconsumptionforeachvehiclelpg1.88benchmarkingreport,withouthavingaccesstothewascalculatedstartingfromtheCO2emissionsbyng-biomethane1.88datafromtheoriginaldataprovider.Therefore,datausingCO2emissionsperunitvolumefordifferentcng1.88processingmustharmonisedatasetsintermsoffuelsandthenbyconvertingthembasedonthegnl2.32categorynames,segments(andsegment-specificvolumetricenergydensityofthefuels.Thefinalother2.32weightandfootprint),powertrains(andpowertrain-values(showninTableA2)areconsistentwithUnknownspecificweightandfootprint),fueleconomytesttheindicationgivenbytheIPCCregardingthewaycycles,andgeographicalcoverage.emissionsofgreenhousegasemissionsfrommobileSource:inlinewiththeIPCCguidelinesonthereportingofCO2emissionsfromfuelcombustionfrommobilesources,considering69.3gCO2/MJ,forsourcesshouldbereported(IPCC,2006).gasoline(IPCC,2006),and33.5MJ/Lforgasoline.ThiscanbedonebymovingtheanalysistotheminimumcommonlevelofgranularityacrosstheForelectricvehicles,specificenergyconsumptionavailabledatasets.Inthiscase,thatisthe“country-wascalculatedfromtheavailabledataonelectricalpowertrain-segment”combination(i.e.thelevelofconsumptionstatedinWh/km.ThiswasconvertedresolutionprovidedintheMarklinesdataset).toLge/100km,assuminganenergycontentofgasolineof9.3kWh/Lge.A.2.1PREPARINGMARKLINESSALESDATAForPHEVs,theelectricconsumptionwasaddedFilterMarklinessalesdatatoremovesalesthatdothefuelconsumptionderivedfromCO2emissionnotfallinthedefinitionofLightDutyVehicles(grossdataandtheelectricconsumptiondatacombinedvehicleweight<3,500kg).throughautilisationfactor,calculatedaccordingtothe“bestestimate”UtilityFactorformuladevelopedbyFraunhoferISI(FraunhoferISI,2021)basedontheelectricrangeofeachmodel.Whenthisdatawasnotavailable,adefaultutilisationfactorof0.5wasusedinstead.57TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION58A.2.4MATCHINGOFPOWERTRAINfuelconsumptioncanvarysignificantlydependingA.3APPLYINGNEWWLTCvariesbyfueltypeand,toalesserextent,byCATEGORIESWITHMARKLINESonthetechnologyapplied(turbocharging,cylinderWLTCCORRECTIONSsegmenttype.CATEGORIESdeactivation,etc.).AllspecificenergyconsumptionvaluesinthisreportTableA4showsthezero-interceptregressionvaluesbyAlistofallcarmodelsincludedintheEEAlistwasTheapproachfollowedfocusedasurveyofrecentaredefinedinWLTCterms.Inpreviousiterationoffuel-powertraincombinationandbyvehiclecategory,manuallymatchedtothemodelnamesavailablechangesinspecificfuelconsumptionintop-sellingthereport,theoreticalconversionfactorsbetweenwherepassengercarsintheEEAdatabasecorrespondsinMarklines.Thismatchingofinformationenablesmodels.Thetop20sellingmodelsintheUSA,China,WTLCandotherdrivecycleswereused.Thisyear,toPassengerLight-DutyVehicles(PLDVs)andLight-toassignavehiclesegmenttoeachregistrationandJapanin2022wereidentified.ThefueleconomyitwaspossibletouserealworlddataonWTLCandCommercialVehiclesareLCVs,inthisreport).TheseincludedintheEEAdata.ofthesevehicleswasmatchedwithexternalsourcesNEDCtestcycles,thusenablingare-benchmarkingnewconversionfactorswereappliedtotheGFEI_0517ineachmarket—USA(FuelEconomyGuide,2023),ofthedata.ThedifferencebetweenNEDCanddataacrossallfuel-powertrain-category(PLDV/LCV)A.2.5JOININGSPECIFICENERGYJapan(MLIT,2020),andChina(MIIT,2023).combinations,togenerateupdatedWLTC-harmonisedCONSUMPTION,WEIGHT,ANDspecificenergyconsumptionvalueforeach“segment-FOOTPRINTDATATOSALESDATAFortheabovecountries,theobservedannualpowertrain-country”timeseries.improvementforeachyearbetween2019andSpecificenergyconsumptiondatafromIEA_19data2022inthetop20sellingmodelswasappliedtoTABLEA4:NEDCtoWLTCconversionfactors,basedonEEAdatabase,2019-2022wasmergedwiththerelevant“segment-powertrain-ICEvehicles.Forallothercountries,a1%peryearcountry”combinationoftheMarklinesdata.improvementratewasassumed,avaluethatisinlinePowertrainCategoryRatioSourcewithhistoricalimprovementrates.EEAdatabaseanalysisFootprintandweightdatafromGFEI_0517wasDieselLCV1.28JRC,2017associatedwiththerelevant“segment-powertrain-A.2.7MISMATCHBETWEENEEAanalysiscountry”combinationoftheMarklinesdata.ItwasVEHICLEFACTORYSHIPMENTSANDElectricLCV1.21SetequaltoPetrol,bynecessarytousethisolderdatasetforfootprintandREGISTRATIONSINCHINAassumptionweightbecauseIEA_19doesnotprovidesufficientPetrolLCV1.17SetequaltoPetrol,bygranularity.Light-dutyvehiclevolumesreportedinMarklinesassumptioncorrespondtoofficialsalesvolumesreportedbytheHybridpetrolLCV1.17EEAanalysisA.2.6IMPROVEMENTSINICEVEHICLEChinaAssociationofAutomobileManufacturersEEAanalysisEFFICIENCYTECHNOLOGIES(CAAM,2023).CAAMdataiscollectedfromcarUnspecifiedLCV1.17EEAanalysismanufacturersandrepresentsfactoryshipments,andEEAanalysisAdrawbackofthecurrentapproachisthat,excepthenceincludesexportsandexcludesimports.Petrol-ElectricLCV1.19SetequaltoDIesel,byforEEAcountrieswheremodel-leveldataonspecific1.13assumptionenergyconsumptionisavailable(for2017-2022),SincetheGFEIdatabasesetseekstocompareLDVsCNGLCV1.09Seetablenoteitisimpossibletoassessimprovementsovertimeregisteredinandacrossnationalandregionalmarkets,1.00JRC,2017withinpowertrain-segmentgroupings.ThisistotalregistrationswereestimatedbymatchingsalesLPGLCVEEAanalysisespeciallyimportantforICEengines,wherespecificvolumesreportedintheGlobalEVOutlook(IEA,1.28JRC,20172023b).ThecorrectedvolumesverycloselymatchFlexfuelLCVEEAanalysistotalsreportedbyCAAM,afterdeductingexportsofNASetequaltoPetrol,byICEandnewenergyvehicles(NEVsincludeplug-inHybriddieselLCV1.21assumptionhybrid,batteryelectric,andfuel-cellelectricvehicles).1.24SetequaltoPetrol,byDieselplug-inLCV1.283assumption1.19JRC,2017HydrogenLCVSeetablenote1.19EEAanalysisDieselPCEEAanalysisEEAanalysisElectricPCSetequaltoDiesel,byassumptionPetrolPCSEETABLENOTEEEAANALYSISHybridPCUnspecifiedPC1.19HydrogenPC1.28Petrol-ElectricPCNACNGPC1.16LPGPC1.15FlexfuelPC1.06HybriddieselPC1.24DIESELPLUG-INPCNACNGPC1.19Note:Plug-inhybridelectricvehicleswereassumedtohavespecificenergyconsumptionintermediatetoBEVsandHEVs,assumingaUtilityFactorof0.5.Thesegment,country,andyear-specificupdatedSECofBEVsandHEVswereusedtoestimatethespecificenergyconsumptionofPHEVs,so:SECPHEV=(SECBEVUR+(1-UF)SECHEV).59TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION60A.3.1RE-BENCHMARKINGNEDCTOEnvironmentalAgency(EEA)andshown,fordieselandFIGUREA4:Powertrain-specificzero-interceptregressionsbetweenNEDCandWLTC,basedonEEAdatafrom2019-2022WLTP(g/km)gasolinepassengercars,inFigureA4.WLTCCONVERSIONFACTORSDiesel–passengercars(inthisreport,PLDVs)TheseratiosweredeterminedalsoseparatelyforFrom2011to2021,analystsattheIEAhaveupdatedpassengervehiclesandlightcommercialvehiclesforall500assessmentsoftheratedspecificfuelconsumptionofbasicpowertrain-fuelcombinationsintheEEAdatasetlight-dutyvehicles(LDVs)basedonproprietarydata(gasoline,diesel,naturalgas,lpg,gasoline-electric,EEA2010-2022coveringnearly90%ofnewLDVsales/registrationsdiesel-electric,e85).SincedirectCO2emissionsfor400(CuenotandFulton,2011,CuenotandKörner,2013,battery-electricandfuel-cellelectricvehiclesare0gIEA,2019a,andIEA,2021a).Thesedataweremerged,CO2/km,ratiosforspecificenergyconsumptionasICCT2014cleanedandvalidatedbasedonpubliclyavailablemeasuredbyNEDCversusWLTCaretakenfromthe300databases,reportedtechnicalspecificationsforvariousJRC(Tsiakmakisetal.,2017).modelsfromOEMs,andresearchandtechnicalreports.200ToenableglobalcomparisonsacrosscountriesandmajorTheseresultssummarizedinTableA5,indicatethatmarkets,conversionfromregionalornationaltestcyclesthesimulatedestimateforconversionfactorsbetween100toasinglegloballyharmonizedtestcycle,theWorldwideNEDCandWLTCdevelopedin2014werelowerbyaharmonizedLight-dutyTestCycle(WLTC),wasfactorof1.05forgasolineand1.20fordieselLDVs.0100200300400performedonthebasisofengineering-basedsimulation0modelsdesignedtomeasurefuelconsumptionandFigureA5pointstoalargergapinEuropethanCO2emissionsforavarietyofvehicleandtechnologyelsewhereandalsotolargercorrectionsinearlierNEDC(g/km)packagesandforaparticulardrivingcycle.From2016years.Thisisprimarilyduetothelargershareofdieselto2021,conversionfactorsweretakenfrompowertrain-vehicles(whicharesubjecttoagreaterrebasingfactorGasoline–passengercars(inthisreport,PLDVs)specific(i.e.gasolineanddieselICE)zerointerceptof1.2,versus1.05forgasoline)inEuropethaninanyregressionsdevelopedbytheICCT(Kühlweinetal.,othermarkets.Atagloballevel,thelargergapinearlier500EEA2010-2022ICCT20142014).TheseweredevelopedbasedonmodellingfromyearsisattributabletothegreaterweightofEuropean400Ricardo’sDataVisualizationTool(DVT),(Meszleretal.,vehiclesalesinglobaltotals.WLTP(g/km)3002013)basedonMSCEasy5(Hexagon,n.d.).Conversion200factorsacrosstestcycles(CAFE,NEDC,JC08,WLTC)A.4REGIONAL100arereportedforgasolineanddieselinTable5.2oftheAGGREGATIONSICCT2014report(Kühlweinetal.,2014).0TheanalysisdevelopedinChapters2and3uses0Forthedataupdateinprogress,basedonrecentregionalaggregationsbasedonthedataavailableliteraturedemonstratingthatthegapbetweenNEDCatthecountrylevel,asdiscussedinearliersectionsandWLTCislargerthanhadbeeninitiallyassessedofthisAnnex.TableA6containsinformationonthein2014(Tsiakmakisetal.,2017,Pavlovicetal.,2018,criteriausedfortheregionalaggregationusedfortheJRC,2023;Dornoffetal.,2020,Dornoff,2023),therepresentationofglobalvehiclemarketsinFigure1.regressionsweredoneusingactualtypeapprovaldataonNEDCandWLTCtestcycleCO2emissionsperformanceforalllight-dutyvehiclesregisteredacrossEuropefrom2019-2022,asreportedbytheEuropean100200300400TABLEA5:RegressionresultsforgasolineanddieselconversionbetweenNEDCandWTLCNEDC(g/km)PowertrainNEDCtoWLTCratioICCT2014NEDCtoWLTCratioupdateRatiobetween2014andNote:Forbothgasoline-anddiesel-fuelledLDVs,certainvaluesfortype-approvalmodelsseemtofollowregressionlines(inthecaseofEEAdata2019-22updatedfactorGasoline1.128gasoline,thisregressionlineisquiteclosetotheoriginalICCT2014zero-interceptfactor).TheauthorssuspectthatthisisduetothefactDiesel1.02911.1851.05thatsomemodelswerenotassessedontheNEDCtestcycle,butinsteadtheNEDCvalueswerederivedbyusingtheCO2MPASmodelling1.2341.20tool(JRC,2020).ThevaluesreportedherearefortheratiobetweenNEDCandWLTCemissionsperformance(gCO2/km)forpassengercars.61TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION62FIGUREA5:WLTCharmonizedsales-weightedaveragespecificenergyconsumptionforLDVs,2005-2022TABLEA6:AggregationcriteriafortherepresentationofglobalmarketdevelopmentsLge/100kmWorldCountryRegion(codename)Region(fullname)12Argentina11_ROWRestoftheWorld11Australia10_AustraliaAustralia10Belarus11_ROWRestoftheWorld9Brazil7_BRA_MEX_MYSBrazil,Malaysia,Mexico8Canada1_USA_CANorthAmerica7Chile11_ROWRestoftheWorld6China5_ChinaChina5Colombia11_ROWRestoftheWorldEEAcountries2_EuropeEurope200520062007200820092010201120122013201420152016201720182019202020212022Egypt11_ROWRestoftheWorldIndia6_IndiaIndiaCorrectedOriginalIndonesia8_INDO_GRPIndonesia,SouthAfrica,ThailandandVietnamIsrael9_MiddleEastMiddleEastLge/100kmChinaLge/100kmEuropeJapan4_JapanJapan1212Kazakhstan11_ROWRestoftheWorld1111Korea3_KoreaKorea1010Kuwait9_MiddleEastMiddleEast99Malaysia7_BRA_MEX_MYSBrazil,Malaysia,Mexico88Mexico7_BRA_MEX_MYSBrazil,Malaysia,Mexico77Myanmar11_ROWRestoftheWorld66NewZealand11_ROWRestoftheWorld55NorthMacedonia11_ROWRestoftheWorldOman9_MiddleEastMiddleEast200520062007200820092010201120122013201420152016201720182019202020212022200520062007200820092010201120122013201420152016201720182019202020212022Pakistan11_ROWRestoftheWorldPeru11_ROWRestoftheWorldCorrectedOriginalCorrectedOriginalPhilippines11_ROWRestoftheWorldPuertoRico11_ROWRestoftheWorldLge/100kmUSALge/100kmJapanRussia2_EuropeEurope1212SaudiArabia9_MiddleEastMiddleEast1111Singapore11_ROWRestoftheWorld1010SouthAfrica8_INDO_GRPIndonesia,SouthAfrica,ThailandandVietnam99Switzerland2_EuropeEurope88Taiwan11_ROWRestoftheWorld77Thailand8_INDO_GRPIndonesia,SouthAfrica,ThailandandVietnam66Turkey11_ROWRestoftheWorld55UnitedArabEmirates9_MiddleEastMiddleEastUkraine11_ROWRestoftheWorld200520062007200820092010201120122013201420152016201720182019202020212022200520062007200820092010201120122013201420152016201720182019202020212022UnitedKingdom2_EuropeEuropeUnitedStates1_USA_CANorthAmericaCorrectedOriginalCorrectedOriginalUruguay11_ROWRestoftheWorldUzbekistan11_ROWRestoftheWorldNote:Dottedlinesindicatetheupdatesales-weightedaveragespecificenergyconsumption(basedontheupdatedNEDCtoWLTCVietnam8_INDO_GRPIndonesia,SouthAfrica,ThailandandVietnamrebenchmarking).SolidlinesshowthepreviouslyestimatedspecificenergyconsumptionadoptedinpreviousGFEIbenchmarkingreports.Source:thisassessment(detailsintheAnnex)basedonEEA,2023andMarklinesdata.Keycriteriausedforthiscategorizationaresummarized•TheEuropeanUnion,countriesintheEuropeaninthefollowinglist:EconomicArea,SwitzerlandandtheUnitedKingdomarehighincome,comparablyhigh•CanadaandtheUnitedStatesarebothhighincome,fueltax,oftenwithgreaterpopulationdensitylowpopulationdensitycountries,withcomparativelyandautomanufacturingcapacity(includinglowfueltaxes(basedonpurchasingpowerparitiesmajorexportingcountries,withmanylegacy[PPP]),withdomesticautomanufacturingcapacityOEMsandfewEVfocusedones),andgenerally(withlegacyOEMsandestablishedandemerging(withtargetedexceptions)netoilimporters,EVfocusedones),notreliantonmajoramountsofwithinterestinenergydiversification.Theyoilimports,leadingtomarketswithverylargecarshaveamixedsegmentationofthecarmarket,and,untilrecently,limitedEVmarketpenetrationleaningtowardslargervehiclesinrecent(oftenfocusedinspecificStates–suchasCalifornia,times,sizeableEVsharesglobally,evenifstilland/orProvinces–suchasQuebec).heterogeneous.63TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION64•KoreaandJapanarebothcountrieswithhighmanufacturers,andself-sufficient,ifnotexporters,ABBREVIATIONSANDincome,highdensity,highPPPfueltax,domesticofoil.Theirvehiclesegmentationismixed,asaACRONYMSautomanufacturing(andexport)capacity(withresultofandincomeeffectfavouringsmallercarslegacyOEMs,someofwhichhavestrongEVandfuelpricesallowingforlargermodelstobeBEVbatteryelectricvehicleambitions,especiallyinKorea).Botharealsooilmoreappealing.EVsharesarelimited,forreasonsCAFEcorporateaveragefueleconomyimporters,withinterestinenergydiversificationsimilartothoseidentifiedforIndia,withtheCNGcompressednaturalgasdespitelimitedopportunitiestoshifttowardsadditionalreasonofself-sufficiencyforoilsupplies.CO2carbondioxiderenewables.TheyhaveacarmarketsegmentationEPAEnvironmentalProtectionAgencysimilartoEurope.•Indonesia,ThailandSouthAfricaandVietnamhaveFCEVfuelcellelectricvehiclecomparativelylowincomeswithrespecttoCanada,GFEIGlobalFuelEconomyInitiative•ChinaisamajoreconomywithmediumincomeEuropeandtheUnitedStates,lowpopulationGREETGreenhouseGases,RegulatedEmissions,andEnergyUseinTechnologieslevels,medium/highurbandensity(especiallydensity(exceptformajorurbanagglomerations),HEVhybridelectricvehicleinthecoastalarea),fairlyhighPPPfueltax,withmediumtolowPPPfueltaxes.TheyhavedomesticICEinternalcombustionenginedomesticautomanufacturingcapacity.Itisalsocarmanufacturingcapacity,theyarenetoilIEAInternationalEnergyAgencyanoilimporter,withstronginterestinenergyimporters,withinterestinoildiversification.TheirLCVlightcommercialvehiclediversification.Itscarmarketisdiverse,includingautomotivemarketsegmentationisnotstronglyLNGliquefiednaturalgassmall/mediumandlargecars/SVUs,reflectingfocusedonlargeSUVs,duetotheincomeeffect,LPGliquefiedpetroleumgasthecombinationofanincomeeffectthatkeepsevenifthisismitigatedbymediumtolowfuelNEDCNewEuropeanDrivingCyclevehiclessmallerthaninhighEurope,Koreaandtaxation.EVsharesarelimited,forreasonssimilarOICAInternationalOrganisationofMotorVehicleManufacturersJapan,andlowerfuelprices(withanupwardtothoseidentifiedforIndia.(OrganisationInternationaledesConstructeursd'Automobiles)impactonsegmentshiftstowardsSUVs).ChinaPHEVplug-inelectricvehiclealsohavelargeEVshares,globally.•TheMiddleEastincludesmanycountrieswithSECspecificenergyconsumptionmediumincome,heterogeneous(andoftenlow,WLTCWorldwideHarmonizedLight-DutyVehicleTestCycle•Indiaasacomparativelylowincome(withrespectoutsideofcities)density,lowPPPfueltax.Thetoearliercases),mediumtohighpopulationregionisnotanautomanufacturer,itisastrongoilUNITSOFMEASUREdensity(includingsomeverydenselypopulatedexporter,withlimitedinterestinoildiversification,States),highPPPfueltax,domesticautoexceptforclimate-relatedrisks.Vehiclesinthecm3cubiccentimetremanufacturingcapacity.Itisamajoroilimporter,MiddleEastendtobelarge,inlinewithlowfuelgCO2-eqgrammeofcarbondioxideequivalentwithinterestinenergydiversification.Itsvehiclestaxation,similartoNorthAmerica.EVmarketGtgigatonnearesmallerthanincountriesoutlinedearlier,duepenetrationissmall,mainlypairedwithearlykgkilogrammetopthecombinationofincomeandfuelpricemovesoneconomicdiversification.kmkilometreeffects.EVsharesarestilllimited,mostlikelyduekWkilowatttoincome-andaffordability-relatedconstraintsand•TherestoftheWorldincludesmainlysmallandkWhkilowatt-hourpresenceoflegacyOEMs.ratherlow-incomecountries,withheterogeneousLlitrepopulationdensities,atendencytoapplylowLgelitreofgasolineequivalent•Brazil,MalaysiaandMexicohavecomparativelytomediumPPPfueltaxandnomajorautom2squaremetrelowincomeswithrespecttoCanada,Europeandmanufacturingcapacity(TurkeybeingakeyMJmegajouletheUnitedStates,ratherlowpopulationdensityexceptiontomanyofthesecriteria).Mostcountries(despitemajordenselypopulatedmegacities)arenetoilimporters.VehiclesegmentationisandmediumtolowPPPfueltaxes.TheyareautomixedandEVsharestendtobelow.65TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION66REFERENCESCazzola,PierpaoloandSantosAlfageme,Maria(2023),Dornoff,Jan(2023),CO2emissionstandardsfornewFacilitatingaTransitiontoZero-emissionVehiclesinpassengercarsintheEuropeanUnion,InternationalACEA(EuropeanAutomobileManufacturers’Bieker,Georg(2021,July20),AglobalcomparisonoftheGlobalSouth,UCDavisInstituteofTransportationCouncilforCleanTransportation,Association)(2022).ACEATaxGuide2022.thelife-cyclegreenhousegasemissionsofcombustionStudies,https://theicct.org/publication/eu-co2-standards-cars-https://www.acea.auto/publication/acea-tax-engineandelectricpassengercars,InternationalCouncilhttps://doi.org/10.7922/G2PK0DGMvans-may23/gu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ionsofnon-tailpipecorrespondsto9.3kWh.Thisisinlinewiththeandpreliminarydatafor2022.largeparticulateemissions(roaddust,tyrewear,and2Datacollectedandreportedhereattempt,totheIPCCguidelinesonthereportingofCO2emissionsbrakewear)resultingfromtheweightincreases–theextentpossible,tofocusonvehiclesclassifiedfromfuelcombustionfrommobilesources,12TherecognitionofasystemicmismatchbetweenSUVshifthasnodirectimplicationsonvariationsasM1intheConsolidatedResolutionontheconsidering69.3gCO2/MJ,forgasoline(IPCC,real-worldandratedNOxemissionsincreasedinpollutantemissions.RegardingICEpowertrainConstructionofVehiclesoftheUnitedNations2006).regulatorypressureandreducedconsumerinterestshifts,differentiatedimpactsrelateprimarilywith(UN,2023),consideredaspassengercarsandindieselvehicles.Since2015,thestringencytheevolutionofsalessharesanddifferencesinSUVs.Lightcommercialvehiclesareclassified7SincegasolineanddieselareagloballytradedofpollutantemissionsstandardsinEuropehasregulatoryrequirementsbetweensparkignitionasN1inthesameResolution.Formarketsnotcommodity,theircostofproductionvarieslittleincreasedmarkedly,especiallyfordieselvehicles(reliantonthegasolinefuelblend)andcompressionapplyingthesedefinitions(inparticulartheacrosscountries.Mostofthevariabilityinfuel(EuropeanCourtofAuditors,2019).Theneedtoignitionvehicles(reliantondieselfuel).UnitedStates),passengercarsareconsideredaspricescanbeexplainedbyfueltaxationandsubsidycomplywiththesestricterpollutantemissionstheCategory1-1vehicleaccordingtotheSpecialregimes.standardserodedthecostadvantagesofdiesel19AccordingtoasimilaranalysisdevelopedbytheResolution1concerningthecommondefinitionscars,especiallyforsmallandmediumvehicles,IEAin2021(fortheperiod2010-2019),attheofvehiclecategories,massesanddimensions8Europeancountries,JapanandKoreatendtoapplysegmentswherethedeclineindieselsalessharesglobalscale,thesegmentshifterodedasmuchas(S.R.1)oftheUnitedNations(UN,2005).Lighthighfueltaxes,whichpushfuelpricesaboveUSDhasbeenfastest.40%ofthefuelconsumptionimprovementsthatcommercialvehiclesbelongtoCategory2and1.5/litre(scaledtoreflectaffordabilityusingPPP).wouldotherwisehaveoccurred,withouttheshiftincludevans.Morespecifically,theyincludeThesales-weightedaveragefuelconsumption13Theseincludedasupercreditmultiplierforvehicles(IEA,2021a).vehiclesinClasses1and2(i.e.LightDutyVehicles)oflight-dutyvehiclessoldinmanyofthesewithratedemissionsbelow50gCO2/km,whichbasedontheclassificationoftheFederalHighwaycountriesareamongthelowestintheworld.Inwasgraduallyphasedoutthrough2022,aswell20SmallincreasesinbiofuelusehavelimitedimpactsAdministration(AFDC,n.d.).thesecountries,fueleconomyregulationsareasincentivesawardedincaseswheretheshareonthecarbonintensitiesofthefuels.Thesearealsostringent.Incontrast,fueltaxesinAustralia,ofzero-andlow-emissionsvehiclesexceedsaneglectedhere.3Theseaffected,atonce,near-termdeploymentofCanadaandtheUnitedStatesarelow,fuelpricesdeterminedbenchmark.sharedvehicles,vehiclelifetimeandturnoverratesarejustbelowUSD1/litre,andtheaveragefuel21Inthiscontext,smallcarshavethelowestconsumerandconsumerinterest.Availableevidencefromconsumptionoflight-dutyvehiclesisabovethe14AsdiscussedinChapter3,Japan’sdesignationappeal,ascarbuyersindevelopedeconomieshaveglobalreviews(suchasSprei,2018;Adler,2019;globalaverage.WhilehighlevelresultsarealsoofandpreferentialpoliciestowardKei-carshigherpurchasingpower,andlowfuelprices/taxesTirachini,2019;andITF,2020a)indicatesthatclearfordevelopingcountries,specifictrendscontributetothecontinuedresilienceofthesmallleadthemtogivelessconsiderationoperatingcosts.thesemayhavecontributedtocontainthegrowthforthe2019to2022developmentsarelesscarsegmentthere.inpersonalvehicleownership,despiteremaininghomogeneous.Iffuelprices,followingascaleup22Otherreasonsforthistendencytowardsanuncertainties.basedonpurchasingpower,arehigh,vehiclesize15Footprintisdefinedastheareadefinedbytheincreaseinvehicleagemayincludequalityandenergyconsumptioninemergingmarketsfourpointswherethetirestouchtheground.Itisenhancementsinvehicles,enablingthemto4NorthAmericaincludestheUnitedStatesandanddevelopingcountriestendtohaveasimilarcalculatedastheproductofthewheelbaseandthebecomemoredurable.MorerecentdevelopmentsCanadabutexcludesMexico,asthatcountry’smagnitudetothoseobservedininEurope,Japanaveragetrackwidthofthevehicle(USDOE,2011).inconnectivityandovertheairsoftwareupdatesvehiclemarketandregulatoryframeworkbothareandKorea.Iffuelpricesarelower,averageenergy–althoughtheyarenotyetpairedwithsizablequitedifferentfromthoseofUnitedStatesandconsumptioninemergingmarketsanddeveloping16Intendedaskerbmass,definedininternationalimpactsatthescaleoftheglobalstock–couldalsoCanada(whosemarketandregulationsarequiteeconomiestendstolieinbetweenthevaluesinregulationsasthemassofthevehicleinrunningstrengthenthistrendfurther,inthefuture.similar).EuropeincludesallmembercountriesofNorthAmericaandthoseinEurope.order,withoutoccupantorload,butwithfuel,theEuropeanEconomicArea(EEA)plusSwitzerlandcoolant,lubricant,toolkitandsparewheel(UN,23Pricesofsecond-handcarshavebeenheavilyandtheUnitedKingdom.Forthefulllistofcountries9ThesearenotincludedinthedatashowninFigure5,2023).influencedbyCovid-19relatedsupplychainineachregion,seeTableA1oftheappendix.astheyaretheresultofdrivingcyclesthataccountshortages,inparticularforsemiconductors,forarangeofaccelerationsandspeeds(withthe17Asdetailedinthe“Microanalysis”sectionresultinginlower-than-expectedavailabilityof5Consumerpricesfornewcarsandtruckshaverisenambitiontorepresentreal-worlddriving)anddooftheGFEIWorkingPaper17,“Wider,Taller,newvehicles.Theseconstraintscontributedtoabyover20%overfouryearssincethesecondhalfnotyetincludetestprocedurestofullyintegrateHeavier:EvolutionofLightDutyVehicleSizeOverpricesurgein2021thathasonlybeenmoderatelyof2020;slightlyhigherthantheoverallincreaseauxiliaryloads.Generations,”vehiclemodelswithinsegmentseasingin2022and2023(Muir,2023;Autovista24,havealsograduallygrownlarger(asmeasuredby2023;Manheim,2023).BothinEuropeandNorthfootprintandheight)andheavier(asmeasuredbyAmerica,second-handvehiclepricesarecurrentlykerbweight)(Cuenot,2019).stillwellabovepre-pandemicvalues.77TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION7824Chapter1andotheranalysesontheEVmarketgenerationandwhereelectricitypricesaresetbyincreasingfrom1.6millionin2021toover2.5butalsoaspartofanindustrialstrategy,anddevelopmentsshowthattheincreaseinEVsharesthemarginalelectricityproducer.millionin2022,and1.75millioninthefirsthalfevenwithprotectionistobjectives.However,iniscurrentlymainlyoccurringinChina,Europeandof2023(CAAM,2023),with2023volumescaseswherethesolutionspromotedbyregulatoryNorthAmerica(IEA,2023;CazzolaandSantos30ThisispossibleincasesshowinggreaterdemandapproachingexportsofGermanyandJapan,developmentsarenotcost-effective,thisexposesAlfageme,2023).forEVsfromhigh-incomehouseholdsandfromtheworld’stwolargestcarexporters.Electriceconomiesandsocietiestorisks,underliningbusinessessubjecttolowercapitalavailabilitypassengervehicleexportsharesroughlymatchtheimportancetomaintainafocusoneconomic25SimilartothecaseoftheSUVshift,impactsofconstraints.TheeffectmaybeenhancedbyfossilChina’smarketshares–forinstance,bothwerecompetitivenesswhendesigningtechnology-theEVtransitiononemissionsoflocalpollutantsfuelpriceincreases.29%in2022(CAAM,2023),andmosthavegonespecificregulatorytools.arenotassessedindetailinthisreport.High-leveltouppermiddleandhighincomecountries(Theindicationsavailablefromotherassessments31ItisworthnotingthatincreaseddemandforEconomist,2023).42Keyexamplesexistinthecaseofbiofuels,sincepointtowardscounteractingeffects,asEVsleadbatteriesforstationaryapplicationscouldalsoincreaseddemandforbio-basedfeedstockstogreatertyrewearandroaddust,buttheyalsohavepositiveimpactsonEVbatterycosts,thanks38Thisargumentmaypartiallyexplaintheinterest(e.g.,wasteoilsorlignocellulosicmaterials)incomewithzeroemissionsoflocalpollutantstothepossibilitytooffergreatereconomiesofofsomeofthemajorOEMstoentermoreroadtransportcantriggershiftsindemandinatthetailpipe.Differencesinoveralllevelsofscaleinbatterymanufacturing.prominentlyintheL6andL7markets–i.e.othersectors(e.g.,thechemicaland/orpaperpollutantemissionsalsodependontheregulatoryquadricycles,basedonUNdefinitions(UN,2023)andpulpindustries),orinthecaseofhydrogen,frameworkandthecompliancepoliciesinplace32Aslongasmotorizationdoesnotleadtoasurge–withEVs,takingadvantageoflowerregulatorysinceincreaseddemandforlow-carbonelectricityindifferentcountries.EVshavebeenfoundinaintrafficcongestion.Thisunderlinestheneedbarriers.PossibledrawbacksrelatedtoroadsafetytoproducerenewablehydrogencanreducetherecentOECDreporttoemitlevelsofnon-exhaustforasystemicapproachtothemanagementofchallenges–includingduetolowerbarriersinavailabilityoflow-carbonelectricityinthegrid,emissionssimilartothoseofwell-maintainedICEtransportdecarbonization,includingmeasurestermsofvehicleageandlicensetodrive,alongsideincreasingdemandforthermal(fossil-based)vehiclesindevelopedeconomies(OECD,2020),relatedwiththedevelopmentoflanduseandminimumsafetyfeaturesoftheselightervehicles,generation,andultimatelyincreasingGHGevenifnon-exhaustemissionsofparticulatemattertransportinfrastructure,acrossdifferenttransportandthefactthattheywouldsharetheroadwithemissions,duetolowerenergyefficiencyoffromtyreandbrakewearwerelargelyunregulatedmodes.cars,pickupsandSUVs–needtobeadequatelyhydrogenusevs.thedirectuseofelectricityacrossbeforetheEuro7norm(currentlybeingfinalized).managed.manyend-uses(wherethehigherefficiencyofThissuggeststhattheyarelikelytoleadtonet33AshifttowardEVscomeswithsignificantcostsfordirectuseofelectricityisanindicatorofbetterbenefitsintermsofairqualityinmanycountries,incumbentOEMs.Thesenotonlyincluderesearch39Afocusonglobalareaswithhighrenewableenergyquality,especiallyforthecombinationofasmostoftheworldstillappliespollutantemissionanddevelopment,butalso–andprobablyaboveenergyavailabilitycouldenablethecost-effectiverenewableelectricityandelectricity-basedenergynormsthatarelessstringentthanEuro6(i.e.,theall–investmentsinnewindustrialfacilitiesandre-productionoflow-carbonhydrogenande-fuels.conversionappliances).normsconsideredinthecomparisonintheOECDskillingofpersonnel.AdditionalindirectcostsareHowever,itshouldbenotedthattherequiredassessment).Importantly,analysesrelatedwithpairedwiththeriskofanearlydismissalofexistingtechnologies,namelydifferentapproachesto43Theworkinggroupaimstodevelopmethodologieshealthimpactsalsopointtolowerrisksfortyrefacilities,orpartsofthem.Theriskoflosingdirectaircapture,arenotyetcommercialised.andstandardstopromotecarbonintensity(CI)wearandroaddustthanforexhaustemissions,marketshare,especiallyinthecontextofpoliciesMoreover,thescaleoffueldemandwouldrequirereductionsacrossallstagesoftheautomotiveduetolowercontentofultra-fineparticlesandmandatingreductionsinGHGemissions,duetoverysignificantratesofdeploymentofrenewableproduction(materialandmaterialrecycling,partsdifferentchemicalcomposition(ITF,2021b).ThisthecompetitivenessofEVsinthatenvironment,energyproductioncapacityintheseglobalareasandvehicleproduction),use,fuelandenergyalsosuggeststhathealthimpactsofEVsrelatedprovidesastrongcounterbalancingforceto(Ueckerdtetal.,2021).Thisissubjecttosignificantprovision,andend-of-life.Saidstandardswouldwithemissionsoflocalairpollutantsarelikelytodelayedinvestmentsinthepowertraintransition.geopoliticalchallenges,includingthoseofintendedbothdefinedefaultcarbonintensity(CI)valuesforbelowerthanthoseofICEVs.North–Southrelations,andquestionsofsocialthepurposesofregulation,anddefineprocedures34ThegreatermaterialintensityofSUVs—andinjustice,exacerbating(duetolowerlifecycleformonitoring,reportingandverificationof26ThepresenceoftheICEanditsvolumeisoneofparticularsteelandaluminiumcontent—togetherenergyefficiency)thosealreadyobservedfortheoperationsthatperformbetter(i.e.reduceCI)thekeyreasonswhyPHEVstendtobemarketedwithrecoveryratesofrecycledmaterialsthatareDesertecIndustrialInitiative(DII),meanttobringthanthedefaults,toenablesuchoperationstobeprimarilyinlargervehiclesegments.Forthiseveninthebestcaseslessthanone,plustheneedlargeamountsofrenewableelectricitytoEurope,certificatedandincentivizedinthemarketplace.reason,PHEVsmayhavehadarelevantrole,forhigh-quality(andoftenprimary)materialsinfromNorthAfrica(Schmitt,2018).Additionalinrecentyears,forOEMdesignchoicesthatcertaincases(e.g.,foradvancedhigh-strengthchallenges,fore-fuelscontainingcarbon,stem44SimilarconsiderationsalsoapplytothecaseofprivilegedashifttoSUVs.steel),meansthatevencircularmaterialflowsfromthesamesustainablebiomassavailabilityhydrogen-poweredvehicles,evenifthesearenotwouldnotbesufficienttosupplymaterialsforconstraintsalreadymentionedforbiofuels(despitethefocusofthisanalysis.Keyexamplesinclude27BEVscanalsobenefitfromopportunitiesforradicalnewlyproducedvehicles.thepossibility,throughco-locationofrenewablehydrogenrefuellingprotocols,nozzles,compressedredesign,incomparisonwithPHEVs.ornuclearelectricityandbiomasssupplies,toand/orliquidhydrogenleaksinconfinedspaces35Theserelatewithlowerrisksofsupplyincreasebiofuelyields,withpower-and-biomasstoandcrashexposurerisks(ITF,2020b).28WelchandNaughton,2023alsorefertoapricedisruptionsinadiversematerialextraction,fueltechnologies),aswellasfromthevolumesofgapof35%betweenEVsandtheirgasoline-fuelledmaterialprocessingandbatterymanufacturingairthatwouldneedtobeprocessedforlarge-scale45Thisisalsothecaseforlife-cycleassessmentscounterparts.environment.directaircapture(DAC).acrossalmostallglobalgeographies,asmanyanalyseshaveshown(e.g.,IEA,2019candBieker,29ThisisduetolowerenergyefficiencyofICEVwith36Vehicleandenergyproduction,alongwiththe40Thesameissueofhugevolumesofairtobe2021),largelythankstothepossibilitytoaccess,respecttoEVsandhigherrelevanceofoperationalconstructionandmaintenanceoftheinfrastructureprocessed,forDAC-basedcarbondioxideremovalwithlowlosses,atleastinpart,primaryelectricitycostsforICEVdrivers.Fossilfuelpricevolatilitytheyrequire,areimportantsourcesofdirectandtechnologies,alsoapplyforoffsets,inadditiontofromrenewableenergiesandalsothankstolowerispartlymitigatedbyfueltaxation,especiallyinindirectemployment(ILO,2018).e-fuelproduction.energyconversionlossesoccurringinstationarycountrieswithhigherfueltaxes.EVdriversarealsothermalelectricitygenerationfacilitiesthaninaffectedbyfossilfuelpricevolatility,especiallyin37China’svehiclesexportsboomedstartingin41Regulations,forLDVsandbeyond,maynotonlymobileICEs.caseswhereelectricityisstillreliantonthermalmid-2020,withnewpassengervehicleexportsbeenactedforenvironmentalorsafetyreasons,79TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION8046Targetedadoptionofhigherregulatory52Differentiatedtaxationisrarelyappliedasa61AsKei-carpoliciespre-datetheEVtransitionbyreachedaprovisionalpoliticalagreementstringency,asinthecaseofpublicprocurement,measureaimingtoenhanceroadsafety,insteaddecades.regardingthismatterinDecember2022canalsoeffectivelybridgethebarrierofthesafetyisusuallyaddressedviaregulatory(EuropeanParliament,2022,EuropeanCouncil,developmentofdifferenttechnicalspecificationsmeasures.62Tiltingthetaxrulesalonedoesnotguaranteea2022)andthefinallegislativetextregardingthis(especiallyregardingsafety),asthese(withpositiveorevenneutralenvironmentalresultiffilewasfinalisedinMay2023(EuropeanUnion,veryfewexceptions–e.g.,lightcommercial53Asinthecaseofluxurytaxes.theoverallestimatedbenefitistoofarbelowthe2023).vehiclesforpostalservicesintheUnitedStates)neutralfiscallevel(Harding,2014).aredevelopedinwaysthatareuniformacross54EspeciallyforEVswithhighpricetags.Forhigh69Strictrequirementsforall-electricdrivinginzeroallLDVs,andnotspecifictodifferentusageincomecountries,thisisonlypartlymitigatedby63Thesocio-economicanddistributionalargument,emissionenvironmentalzonesareimportantpatterns.thepossibilitythatanacceleratedEVdeployment,togetherwiththefocusofbusinessesonthetotaltoensurethatthereisgreaterconsumerandthankstotaxadvantages,canhaveontheEVcostofownershipratherthanpurchaseprices,industryfocusonlargerPHEVbatteries(stillfar47Alsoduetotheirroleinthecontextofmaterialavailabilityforlow-andmiddle-incomefamilies,aslikelyexplainsthelowerpurchasegrantsforEVsinsmallerthanBEVbatteries)inatransitionalphasecircularity,asthemineralsbecomepartofthetheytrickledowntothesecond-handvehiclemarket.manycountriesforcorporatecars(CarpenterandtowardshighsharesofEVsforroadtransportvehiclestockrepresentinganassetinthecontextAntich,2022).RevisingEVandotherincentiveselectrification.Digitaltechnologies,includingofcross-sectoraldecarbonisation,thanksto55Thisargumentisalsoapplicabletopollutantforcorporatevehiclesrequiresredistributionofthesolutionsenablinggeofencing,canhelpensurelowerenergyintensityinprocessesconvertingemissions,butonlyforsecondhandimports,asadditionalgovernmentalrevenuesgeneratedfromthatall-electricdrivingforPHEVsintheseareasscrapmetalsthaninprocessesrequiringnewlightdutyvehiclesaresubjecttothesamehighertaxesoncompanycars.Negativeimpactsiseffectivelyenforced,mobilizingPHEVownersprocessingvirginmaterials.regulatorylimits,perkmdriven.onthebalancesheetofbusinessescanbehandledtouseelectricityasexternalenergysource.throughashiftinvehiclepurchasedecisionsawayOtherpoliciessupportingincreasedsharesof48Moreintensiveuseisnotlimitedtothecase56Doingsomayrequiretechnology-specificfromlargerandmoreexpensivevehiclestowardsall-electricdrivingforPHEVsincludetherecentoftaxisandridesourcingservices,butitisalsoprovisions(e.g.,favouringmoreenergyefficientmoreenvironmentallyfriendlytechnologies.correctionsofutilityfactorsinthecontextoftherelevantforheavydutyroadvehicles,likebusesvehicles,duetolowerrisksofhigheremissionsWLTPtestprocedure,aswellascontinuedon-andtrucks,aswellassharedmotorcycles.fromfuelproduction).Notdoingsorisksproviding64Andasmanyofthesecond-handEVsavailableboardmonitoringofdrivinghabitsonPHEVs,withsignalsthatmisleadinvestments,withnegativeareanywaysinlargerandmoreexpensivemarketrespecttotheseindicators.49Alongsideotheremissionreductionapproachesimplicationsforassetsthatarenotalignedwithsegments.(e.g.,reduceddeadheading,increasedrelianceoverallsustainabilityrequirements.70Thisincludes(butisnotlimitedto)fastchargers,onsharedservices,includingon-demandshuttle65Clearprospectsforlowelectricitycostsreinforcewhichmayrequiretargetedsupport,alsotoservicesoperatedbyvansandminibuses(ITF,57Moreover,specificcompanycartaxationschemesthiseffectfortheEVtransition(Robinetandenablebetteravailabilityoflow-costelectricity,2020a).excludeavariablecomponentperunitofdistanceGérardin,2023).Thesearemorelikelyincontextsgivencontinuingchallengestoensurethattheytravelled,resultinginincentivestoincreasecarwithhighsharesoflow-costandlow-carbonhaveaneffectivebusinessmodel,possiblyalso50Thiswaspartofacomprehensiveschemeuseoverothertransportoptions(Harding,2014).generationtechnologies,alsobecauseoftheincaseswheretheyareownedbyOEMsorbythatincludesmandatoryagelimitsfortaxis,Others,excludingafixedcomponent(e.g.,relatedneedtorationallyapplytaxestoaddressthejointventures(asthesemodelsmaystillrequireincentivesfortheearlyretirementofvehicles,withvehicleacquisitioncosts),mayprovideexternalitiesofunablatedfossilenergyusedforsubsidizationfromrevenuesgeneratedbyvehicleinvestmentsforthedeploymentofpubliclyincentivestoincreasethesizeorvalueoftheelectricitygeneration(OECD,2019a).sales).accessibleelectricvehiclechargersandthevehiclebeyondwhatwouldbeheldifthefullcostspossibilitytoexpresspreferencesontheirweretaxed(Harding,2014).66Fuelexcisedutiesaregenerallyconsideredavery71Forinstance,requirementsforquadricyclesdonotlocation,financialsupportfortheinstallationofeffectivetaxinstrumenttodealwithnegativeincludeairbagsandarenotsubjecttocrashtesthomechargersanddiscountedchargingrates58Wherevehicleownershipisrestrictedtohigh-implicationsoffossilfueluseontransportvehiclesrequirements(NCAP,2016,UN,2023).(ITF,2020a;TfL,2020).incomehouseholdsandbusinesses,generally(CarpenterandAntich,2022).representingasmallerfractionofthetotal,in72InthecontextofUNRegulations,thesevehicles51Anexampleofprovisionsthatgoesinthecomparisonwithhigh-incomecountries.67Netofenergysecurityaspects,theefficientpricecorrespondtotheL6andL7categories,ratheroppositedirection,offeringanopportunitytoperunitofafossilfuelproductincludessupplythanM1forcarsandN1forlightcommerciallearnlessonsonpracticesthataredetrimental59MostoftheWTOagreementsaretheresultofthecosts,costsduetoenvironmentaldamage(duevehicles.forthemanagementofvehiclesizeandweight1986-94UruguayRoundnegotiations,signedatthetoemissionsofGHGsandlocalairpollutants)increase,isthecaseofnewdesignguidanceMarrakeshministerialmeetinginApril1994(WTO,congestion,crashes,roaddamageandgeneral73InEuropeancities,electricmicrovehiclescanbeissuedin2022forparkingspacedimensionsinn.d.f).consumptiontaxes(Parryetal.,2021).usedbypeopleasyoungas14(ITF,2023).theUnitedKingdom.Thisproposestoincreasethelength(from4.8to5meters)andwidth60Kei-carsareJapan’ssmallestvehiclesegment68The‘Fitfor55’packageincludedaproposal74Thesameconsiderationsemergefromtheneed(from2.4to2.6meters)ofparkingspaces,andasdefinedbymaximumdimension,engine(EuropeanCommission,2021)tocreateaseparateforalternativetransportmodesneededforextra-claimsthattheprinciplesbehindtheseincreasesdisplacementandpowerlimits.TheyaresubjecttonewEmissionsTradingSystem(ETS)forroadurbantravel(ITF,2023).haveglobalapplicability(BritishParkingpreferentialtaxation,parking,andotherregulatorytransportandbuildings,withfueldistributorsasAssociation,2022).policies.regulatedentities.TheCouncilandtheParliament81TRENDSINTHEGLOBALVEHICLEFLEET2023-MANAGINGTHESUVSHIFTANDTHEEVTRANSITION82ContactusGlobalFuelEconomyInitiative60TrafalgarSquare,London,WC2N5DS,UK+44(0)2079303882(t)+44(0)2079303883(f)Formoreinformation:www.globalfueleconomy.org@globalfuelecon@globalfuelecon@globalfueleconcompany/global-fuel-economy-initiativeWiththesupportof

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