What the Global Fuel Economy Initiative Could Mean for Startups

50by50-logoIf the average fuel economy of all new cars on the world’s roads improved 50 percent by 2020 2030, it could save put us on the road to saving more than 6 billion barrels of oil per year by 2050. Think it’s ambitious? Maybe, but the International Energy Agency, the UN Environment Program and a handful of other global agencies say it can be achieved with existing technology and a few key policies. By 2050, they want to see fuel economy of the entire global fleet (not just new cars) improve by 50 percent.

Today the agencies launched a campaign — the Global Fuel Economy Initiative — at the Geneva Motor Show, and unveiled a roadmap for reaching their target. If implemented, the plan could create new opportunities for PHEV conversion startups, battery developers and electric car makers.

“Through tax incentives and information campaigns [this initiative] would help encourage consumer demand for more fuel efficient cars,” FIA Foundation Director General David Ward said in an announcement today. “This is not an agenda for some point far off in the future. Our 50 percent fuel efficiency target requires us to change direction and take important actions right now.”

Launched mere hours after General Motors President Fritz Henderson said the automaker’s European operations will go kaput in the second quarter of this year unless governments across the EU cough up aid, the campaign calls for governments to “provide incentives and set regulations for vehicle components that fall outside current vehicle testing, incentive and regulatory systems.”

To start, the group is urging long-term, international standards for fuel economy or vehicle emissions as a way to encourage investment in fuel efficiency — and not just through an overhaul of existing automakers’ lineups, although that’s certainly part of the grand vision. In the near term, GFEI wants to see movement on low-tech MPG boosters, including after-market improvements. While the roadmap released today suggests programs to promote tire replacement, fuel efficient driving and better vehicle maintenance, incentives along these lines could conceivably be a boon to PHEV conversion companies like Hymotion, 3Prong Power, EDrive Systems, OEMTek and Plug-In Conversions Corp., which retrofit hybrid cars into plug-in electric vehicles.

As for battery and powertrain developers, mandates for phased-in fuel economy improvements (30 percent by 2020 and 50 percent by 2020 2030 for new cars) and emission standards could help pave the way for bigger supply deals and partnerships with automakers, such as LG Chem’s lithium-ion cell deal with GM for the Volt and Tesla Motors’ powertrain deal with Daimler AG.

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