Fuel Consumption of New Passenger Cars in India: Manufacturers’ Performance in Fiscal Year 2018–19
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WORKING PAPER 2020-13 © 2020 INTERNATIONAL COUNCIL ON CLEAN TRANSPORTATION MAY 2020 Fuel consumption of new passenger cars in India: Manufacturers’ performance in fiscal year 2018–19 Authors: Ashok Deo and Zifei Yang Keywords: India CO2 standards, corporate average fuel consumption, CO2 compliance and enforcement, GHG emissions, fuel efficiency Introduction Passenger vehicles sold in India have been subjected to fuel-consumption standards established by the Ministry of Power since fiscal year (FY) 2017–18.1 In 2018, the ICCT evaluated how well manufacturers of new vehicles sold in FY 2017–18 complied with the standards.2 Building on that, this paper examines the fuel consumption of manufacturer groups for passenger vehicles sold in FY 2018–19 and evaluates their readiness to meet more stringent requirements that will take effect in FY 2022–23. We evaluate new passenger vehicle performance and identify basic vehicle specifications by fuel type and manufacturer group. This paper also considers the potential impact of flexibility mechanisms on manufacturers’ compliance with the standards, and compares results with the summary compliance report published by Ministry of Road Transport and Highways (MoRTH).3 Our analysis is based on FY 2018–19 sales data and vehicle characteristic information from Segment Y Automotive Intelligence Pvt. Ltd., which focuses on automotive markets in Asia. Annual data purchased from Segment Y covered FY 2006–07 through 2012–13, 2015–16, 2017–18, and 2018–19. Moreover, the fuel economy data was verified with data from the Society of Indian Automobile Manufacturers (SIAM) and updated.4 This verified data covers 99.6% of the new vehicle sales in FY 2018–19. www.theicct.org 1 Government of India, Ministry of Power, “Gazette of India: Extraordinary. [Part II-Sec. 3(ii)],” April 23 2015, https://beeindia.gov.in/sites/default/files/Fuel%20Efficiency%20Notification%20%2823April2015%29.pdf. Note [email protected] that the fiscal year in India runs from April 1 to March 31 of the following year. 2 Zifei Yang, Compliance with India’s first fuel consumption standards for new passenger cars (FY 2017–2018), twitter @theicct (ICCT: Washington, DC, 2018), https://theicct.org/publications/compliance-india-fuel-consumption-standards-pv 3 Government of India, Ministry of Road Transport and Highways, “Annual fuel consumption compliance report in respect of M1 Category vehicles for the year 2018–19,” November 6, 2019, https://morth.gov.in/Circulars- Notifications-related-to-Road-Transport. This report gives the compliance target and actual performance of each passenger car manufacturer, but there is no detailed information on parameters like fleet average curb weight, or the impact of electric vehicles, hybrids, and CO2-reducing technologies on overall performance. 4 The fuel economy of vehicles sold in FY 2015–16 through 2018–19 are from SIAM, http://www.siamindia.com/ cpage.aspx?mpgid=31andpgidtrail=82 , accessed on December 8, 2019. For models that do not have SIAM fuel economy information and for the fuel economy of vehicles sold in FY 2006–07 through 2011–12, we collected information from manufacturers’ websites and from advertisements. Background India is the fifth-largest passenger vehicle market in the world by sales volume, and SIAM data shows annual sales in FY 2018–19 reached 3.4 million (Figure 1). Compared to FY 2017–18, passenger car sales in FY 2018–19 marginally increased by about 3%. 4.0 70% 3.4 3.5 60% 3.1 3.0 2.8 2.7 50% 2.5 2.6 2.5 40% 1.9 2.0 30% 1.5 1.5 Million units 1.5 20% Annual growth rate 1.0 10% 0.5 0 0% 2007–08 2008–09 2009–10 2010–11 2011–12 2012–13 2013–14 2014–15 2015–162016–17 2017–18 2018–19 Figure 1. The trend of passenger vehicle sales in India. Source: SIAM data. In 2015, the government of India established corporate average fuel consumption standards for passenger cars. They take effect in two phases—the first targets began in FY 2017–18 and the second are slated to begin FY 2022–23. The standards are set in terms of gasoline-equivalent liters per 100 kilometers (L/100 km) and are based on vehicle curb weight. In 2018, MoRTH, the agency in charge of implementing the vehicle fuel-consumption standards, finalized the document that describes how to determine the compliance of manufacturers with the fuel-consumption standards.5 The actual fuel consumption for compliance is measured as grams of carbon dioxide (CO2) emissions per kilometer (g/km) during vehicle type approval. The factors for converting consumption of different fuel types into gasoline-equivalent fuel consumption and for converting from gasoline-equivalent fuel consumption to CO2 6 emissions are defined in the regulation. The CO2 values provided by the manufacturer 7 during type approval are called the declared value (DV). The CO2 value derived from the type approval test should not exceed the DV by more than 4%. The accuracy of the DV is again checked during conformity of production (COP) tests. The CO2 values used in our analysis are DVs. The compliance document includes flexibility mechanisms that are intended to reduce compliance costs and promote innovative technologies that reduce CO2 emissions. The flexibility mechanisms that would influence manufacturers’ compliance with standards include derogation factors for CO2-reducing technologies and super credits for battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), and strong hybrid electric vehicles (HEVs). 5 Government of India, Ministry of Road Transport and Highways, “Administrative and technical procedure for measurement and monitoring [average] fuel consumption in l/100 km of M1 category vehicles with GVW not exceeding 3500 kg,” AMENDMENT No. 7 TO Doc. No.: MoRTH/CMVR/ TAP-115/116: Issue No. 4 (2018), https:// www.icat.in/pdf/Amendment_7_TAP_CAFE_23052018.pdf 6 Fuel types include gasoline, diesel, liquid petroleum gas, compressed natural gas, and electricity. Gasoline equivalent fuel consumption (liters/100 km) = 0.04217 (g/liter) × CO2 emissions (g/km) 7 Government of India, Ministry of Road Transport and Highways, “Administrative and technical procedure” 2 ICCT WORKING PAPER 2020-13 | FUEL CONSUMPTION FROM NEW PASSENGER CARS IN INDIA Derogation factors for CO2-reducing technologies aim to reward innovative technologies that produce real-world CO2 savings beyond what is measured over a standardized test cycle during vehicle type approval. The compliance provisions allow manufacturers to use derogation factors for four CO2-reducing technologies—regenerative braking, start-stop systems, tire pressure monitoring systems (TPMS), and 6-speed or more transmissions. Note, meanwhile, that TPMS is mandatory for safety under U.S. and EU regulations. In India’s standard, CO2 emissions values are multiplied by 0.98 for each CO2-reducing technology applied on a vehicle. While manufacturers are allowed to demonstrate the savings of CO2-reducing technologies (1 g/km or more) other than the four on the list, the total CO2 reduction due to the derogation factors of listed technologies or additional technologies cannot exceed 9 g/km. The first compliance report published by the MoRTH showed that all car manufacturers met the FY 2017–18 fuel consumption standards when various flexibility mechanisms were taken into account.8 This paper evaluates compliance for 2018–19 by referring to the fuel-consumption standards and the rules for evaluating compliance by manufacturer groups. Fuel-consumption standards and compliance are reported in terms of equivalent CO2 emissions. Basic specifications of the fleet Figure 2 plots the recent trend of market share of annual new passenger vehicle sales by fuel type. In FY 2018–19, 37% of the new vehicles sold in India were diesel vehicles and 63% were gasoline vehicles. Compared with FY 2017–18, the diesel market share dropped 4.4%. 70% 60% 50% Gasoline Diesel 40% CNG 30% LPG Market share 20% Electric 10% 0% 2007–08 2009–10 2011–12 2013–14 2015–16 2017–18 2008–09 2010–11 2012–13 2014–15 2016–17 2018–19 Figure 2. Trends of passenger vehicle sales in India by fuel type Prior to 2014, the price of diesel fuel was regulated by the Government of India, and diesel prices were lower than gasoline prices. Cheap diesel prices combined with higher fuel efficiency made the total cost of ownership of diesel vehicles much more affordable than gasoline vehicles. However, after the deregulation of diesel fuel, the price gap with gasoline decreased steadily and diesel vehicles became costlier to own. In addition, the new Bharat Stage (BS) VI emission standards require diesel vehicles to contain advanced emission control technologies that increase the upfront cost. As a result, the market share of diesel vehicles, especially smaller ones, is likely to continue declining. 8 Government of India, Ministry of Road Transport and Highways, “Annual fuel consumption compliance report in respect of M1 category of vehicles with GVW less than 3.5 T for year 2017–2018,” https://morth.gov.in/sites/ default/files/circulars_document/Annual_Fuel_Consumption_compliance_report_in_respect_of_M1_category_ of_vehicles_with_GVW_less_than_3.5_T_for_year_2017-2018%C2%A0%2837KB%2C%C2%A0.pdf 3 ICCT WORKING PAPER 2020-13 | FUEL CONSUMPTION FROM NEW PASSENGER CARS IN INDIA The market share of electric vehicles has remained fairly stagnant over the past decade at about 0.06%, while the market share of compressed natural gas (CNG) vehicles has decreased from 1.7% to 0.1%. The decrease in the diesel portfolio has also impacted the average curb weight of all major passenger car manufacturers. Figure 3 plots the historical trend of curb weight and engine displacement of the new vehicles sold by fuel type. 1,500 1,400 1,300 1,200 Diesel 1,100 Gasoline Fleet average 1,000 Curb weight (kg) 900 800 700 2006–07 2008–09 2010–11 2012–13 2014–15 2016–17 2018–19 2007–08 2009–10 2011–12 2013–14 2015–16 2017–18 2,100 1,900 1,700 ) 1,500 Diesel 1,300 Gasoline Fleet average 1,100 Displacement (cc 900 700 500 2006–07 2008–09 2010–11 2012–13 2014–15 2016–17 2018–19 2007–08 2009–10 2011–12 2013–14 2015–16 2017–18 Figure 3.