Vehicular tailpipe emissions have one of the largest impacts on urban air quality. One way to reduce these hazardous emissions is to reduce the amount of fuel consumed by on-road vehicles. In this research, we consider both vehicle design and driver behavior as crucial elements in evaluating the environmental impact of two-wheel vehicles. Any redesign of vehicle specifications, results in different driving patterns that need to be re-evaluated in a realistic environment with traffic simulation. Therefore we developed traffic simulations with mixed fleets to model scooter/driver behaviors to reflect urban driving scenarios. Based on the results, a 31-variable continuous variable transmission (CVT) design and a 14-parameter cellular automata traffic model are integrated. Simultaneous redesign of CVT with traffic simulation can reduce the fuel consumption by 16.2% in our case study. This promising outcome demonstrates the need for multi-discipline integration of real-world traffic impact assessments and improvements.