Improvements in internal-combustion-engine (ICE) technologies will allow car manufacturers to cut future carbon emissions by approximately 40%, according to this new report released yesterday by The Boston Consulting Group.

Although electric vehicles (EVs) are often seen as the most “green” transport option, Powering Autos to 202: The Era of the Electric Car? claims that high battery prices make EVs a more expensive and possibly even dirtier option than traditional ICE technologies that increase gas mileage and therefore reduce emissions.

“Electric cars will undoubtedly play an increasingly large role in many countries’ plans in the decades ahead as energy independence and environmental concerns intensify, but they will gain only modest ground to 2020. Gasoline- and diesel-powered vehicles are improving faster than expected and will continue to dominate the global landscape.” said Xavier Mosquet, a senior partner in the firm’s Detroit office, global co-leader of BCG’s Automotive practice, and lead author of the report.”

The report says ICE improvements will force manufacturers to make tougher choices regarding tightening emissions standards.

“The challenge…as the decade unfolds will be to prepare for and retain the flexibility to switch among the different paths the industry could take,” the report says.

Reducing Oil Consumption

The United States has been increasing efforts to regulate the oil-hungry transportation sector. Department of Energy (DOE) Secretary Steven Chu announced the National Clean Fleets Partnership this April, a public-private program that will help companies reduce their diesel and gasoline usage by incorporating EVs and alternative fuels into their trucking fleets.

The DOE partnered with six corporations in July that will be participate in the program, including Coca Cola, Enterprise Holdings, General Electric, OSRAM SYLVANIA, Ryder and Staples, who will taking specific actions to reduce oil consumption. Coca Cola, for example, will deploy hybrid and hydraulic hybrid trucks this year as part of its delivery fleet. General Electric will deploy 25,000 electric vehicles by 2015.

“This initiative will support the nation’s largest commercial fleets as they move to adopt fuel-efficient vehicles that will reduce our dependence on foreign oil and improve our energy security,” said Chu.