•Innovation can also play an important role in improving systems-level efficiency. For instance, innovation in digital technologies -- from communications to deep learning algorithms -- can help match and optimise transport supply and demand.

Fuel economy of cars and vans

•The car industry is one of the highest spenders on research and development, representing nearly 25% of global R&D spending in 2018 (Auto Alliance, 2018).

•Numerous technologies can lead to fuel economy improvements, including:

•energy efficient tires

•improved aerodynamics

•fuel efficient combustion technologies and engine downsizing

•powertrain electrification

•Reducing vehicle weight is a key means to improve fuel efficiency. Lightweighting techniques such as using high-strength steel and aluminium in the chassis can reduce the

mass of the vehicle while cutting both fuel consumption and total life-cycle CO2 emissions (Serrenho, 2017).

•So far, however, most of the fuel economy benefits of lightweighting have been offset by the increased weight of upscale features, safety enhancements and increased vehicle size in many markets.

Gap 1 : Advanced internal combustion engines

•Despite the increasing market share of EVs, IEA scenarios show that a large share of the LDV fleet will be powered by internal combustion engines (ICEs) in conventional, hybrid and

plug-in hybrid configurations until at least mid-century. Reducing ICE CO2 emissions is thus a key part of a balanced strategy for limiting atmospheric CO2 levels. Improving ICEs is also a cost-effective CO2 mitigation strategy.

•ICEs operating on electrofuels generated when excess renewable electricity is available may even promote more rapid decarbonisation of the electricity supply while providing near-zero

carbon emissions. Additional CO2 emissions reductions could also be gained through the use of bio-derived or other low-carbon fuels along with ICE design optimisation to take full advantage of their properties.

•Reducing local pollutant emissions of particulate matter, unburned hydrocarbons and nitrogen oxides from ICEs remains an important challenge. The move to vehicle hybridisation with start-stop systems can also result in higher pollutant emissions if exhaust after-treatment devices are not operating effectively (SAE, 2018).

Gap 2: Lightweighting of light duty vehicles (LDVs)

Although the average weight of new LDVs remained relatively stable globally during 2015-17, in more than two-thirds of countries average LDV weight actually increased – with increases in three-quarters of countries in 2016-17 alone. This is the result of three counterbalancing trends: first, growth in the market share of large LDVs (SUVs and pick-up trucks) raised vehicle weight.

At the same time, however, an increasing volume (and share) of vehicles were being sold in emerging economies. These vehicles tend to be smaller and lighter than new vehicles sold in advanced economies, which tempered the effect of higher large-LDV sales.

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