With life cycle assessment (LCA) methodology, a life cycle model of coal-based vehicle fuels (CBVFs) including coal-based dimethyl ether (CBDME) and coal-based diesel (CBD) is established. Their primary energy consumption (PEC) and global warming potential (GWP) from well to wheel including feedstock extraction, fuel production, fuel consumption in vehicle and energy transportation are calculated and compared. Results show that the life cycle PEC and GWP of CBD pathway are 1.17 and 1.34 times as CBDME pathway. Based on the above results, CBDME will become a choice with great potential to replace conventional petroleum-based diesel (CPBD) in China.