While the UK has committed to reduce CO₂ emissions to 80% of 1990 levels by 2050, transport accounts for nearly a fourth of all emissions and the degree to which decarbonisation can occur is highly uncertain. We present a new methodology using vehicle and powertrain parameters within a Bayesian framework to determine the impact of engineering vehicle improvements on fuel consumption and CO₂ emissions. Our results show how design changes in vehicle parameters (e.g. mass, engine size and compression ratio) result in fuel consumption improvements from a fleet-wide mean of 5.6 L/100 km in 2014 to 3.0 L/100 km by 2030. The change in vehicle efficiency coupled with increases in vehicle numbers and total fleet-wide activity result in a total fleet-wide reduction of 41±10% in 2030, relative to 2012. Concerted internal combustion engine improvements result in a 48±10% reduction of CO2 emissions, while efforts to increase the number of diesel vehicles within the fleet had little additional effect. Increasing plug-in and all-electric vehicles reduced CO2 emissions by less (42±10% reduction) than concerted internal combustion engines improvements. However, if the grid decarbonises, electric vehicles reduce emissions by 45±9% with further reduction potential to 2050.