The Economics of Electric Vehicles

The world is rapidly growing and changing and countries need to address vital future energy requirements like achieving sustainable transportation. One of the most promising pathways to increased energy security and reduced emissions of greenhouse gases and other pollutants is to produce and buy Electric vehicles (EVs). EVs reduce dependence on petroleum and work by using a source of electricity that is often domestically produced and relatively inexpensive, when comparing it to petroleum products. Also, EVs create the grounds for innovation and increase the possibilities to develop new advanced industries that create job growth and that enhance economic prosperity.

2016

Electric vehicles (EVs) are considered as an important means to cope with current environmental problems in the transport sector. However, their current use is very limited mostly due to considerably higher capital costs, especially because of the battery, and limited driving ranges in comparison to conventional cars. The objective of this paper is to investigate the prospects of various types of EVs from an economic and environmental point of view. The major focus is on investigation of the sensitivity of the environmental benefits of EVs depending on the development of the carbon intensity of the electricity mix in the EU. Our method of approach is based on calculation of total cost of ownership of EVs in comparison to conventional cars , and a life-cycle approach to assess their environmental benignity. The analysis of future prospects it is based on technological learning especially regarding investment costs of batteries. There are different types of EVs with the different leve...

Transportation Research Part D: Transport and Environment, 2016

Electric vehicles (EV) are often considered a promising technology to decrease external costs of road transport. Therefore, main external cost components are estimated for EV and internal combustion engine vehicles (ICEV). These include costs of accidents, air pollution , climate change, noise, and congestion. All components are estimated over the product lifetime and, where appropriate, differentiated according to fuel type, vehicle size as well as emission location and time. The advantage of this differentiation is, however, compensated by high uncertainties of most cost estimates. Overall, the external costs of EV and ICEV do not differ significantly. Only for climate change, local air pollutants in congested inner-cities, and noise some advantageous effects can be observed for EV. The advantages depend strongly on the national electricity power plant portfolio and potentially also on the charging strategy. Controlled charging might allow for higher emission reductions than uncontrolled charging of EV.

Calculates the total cost of ownership across competing vehicle technologies. Uses Monte Carlo simulation to analyse distributions and probabilities of outcomes. Contains a comprehensive assessment across the main vehicle classes and use cases. Indicates that cost efficiency of technology depends on vehicle class and use case. Derives specific policy measures to facilitate electric vehicle diffusion. a b s t r a c t While electric vehicles (EV) can perform better than conventional vehicles from an environmental standpoint, consumers perceive them to be more expensive due to their higher capital cost. Recent studies calculated the total cost of ownership (TCO) to evaluate the complete cost for the consumer, focusing on individual vehicle classes, powertrain technologies, or use cases. To provide a comprehensive overview, we built a probabilistic simulation model broad enough to capture most of a national market. Our findings indicate that the comparative cost efficiency of EV increases with the consumer's driving distance and is higher for small than for large vehicles. However, our sensitivity analysis shows that the exact TCO is subject to the development of vehicle and operating costs and thus uncertain. Although the TCO of electric vehicles may become close to or even lower than that of conventional vehicles by 2025, our findings add evidence to past studies showing that the TCO does not reflect how consumers make their purchase decision today. Based on these findings, we discuss policy measures that educate consumers about the TCO of different vehicle types based on their individual preferences. In addition, measures improving the charging infrastructure and further decreasing battery cost are discussed.

Future Internet

The automotive industry is marching towards cleaner energy in the impending future. The need for cleaner energy is promoted by the government to a large degree in the global market in order to reduce pollution. Automobiles contribute to an upper scale in regard to the level of pollution in the environment. For cleaner energy in automobiles, the industry needs to be revolutionized in all needed ways to a massive extent. The industry has to move from the traditional internal combustion engine, for which the main sources of energy are nonrenewable sources, to alternative methods and sources of energy. The automotive industry is now focusing on electric vehicles, and more research is being highlighted from vehicle manufacturers to find solutions for the problems faced in the field of electrification. Therefore, to accomplish full electrification, there is a long way to go, and this also requires a change in the existing infrastructure in addition to many innovations in the fields of inf...

Greenhouse Gases-Science and Technology, 2020

Currently, the electrification of passenger cars is seen as one of the key strategies for heading toward a sustainable transport system. Of special interest are battery electric vehicles (BEVs), which can enable significant emission reductions if electricity used is produced from renewable energy sources. However, mainly due to their high investment costs (retail purchase price) of BEVs, they are currently not economically competitive with conventional fossil-fueled vehicles without different supporting policy measures. This paper analyzes current costs and future prospects for BEVs compared to conventional petrol cars looking at the total costs of ownership. Furthermore, the future prospects are investigated considering technological learning for BEVs, CO 2 taxes for fuels, and various other policy framework conditions such as rebates for the purchase of the BEVs. The major conclusions are as follows: (i) to improve the economics of BEVs, a very important aspect is the introduction of CO 2-based fuel taxes; (ii) regarding economics, the second important aspect is the reduction of the investment costs of the BEVs due to technological learning, especially of the battery; (iii) in addition, the introduction of CO 2-based registration taxes for the purchase of passenger cars makes sense; (iv) subsidies or rebates for the purchase of a BEV maybe a measure successful in the short term and helpful to stimulate technological learning; (v) by far, the highest uncertainty regarding the future prospects of BEVs is how fast technological learning will take place, especially for the battery, and how the future development of batteries will be.

Transportation Research Record: Journal of the Transportation Research Board, 2010

This study examines the relative economics of electric vehicle operation in the context of current electricity rates in specific utility service territories. Fourteen utility territories offering electric vehicle (EV) rates were examined, with a focus on California but including other regions of the United States. The consumer costs of EV charging were examined in comparison with gasoline price data, geographic location, and three highly variable gasoline price periods: July 2008, January 2009, and July 2009. In a switch from a conventional 23 mpg (10.2-L/100 km) vehicle to a 300 Wh/mi electric vehicle driven 10,000 mi (16,100 km) per year, the study finds that savings in fuel costs range from approximately U.S.$100 to U.S.$1,800 annually, with considerable geographic variation and with higher-end values mostly in summer 2008, when gasoline prices were relatively high. Charging off-peak instead of during peak periods saves an average of only a few hundred U.S. dollars per year, rend...

2000

This report presents an analysis of the initial cost of electric vehicles (EVs). The manufacturing and retail cost structure of mature conventional vehicles produced at high volume is analyzed first, and the contributions by various cost categories to vehicle price are estimated. The costs are then allocated to such vehicle component groups as body, chassis, and powertrain. The similarities and differences among various component systems are reviewed. In electric vehicles, an electric drive replaces the conventional powertrain, and a battery pack replaces the fuel system. Three types of traction motors are reviewed, and their cost in high-volume production is analyzed. Various components of the motor and controller package are analyzed, and their representative costs are summarized. Four types of EV batteries are reviewed, and their costs are presented. Various alternatives for the low-, medium-, and high-volume production of EVs are evaluated, and some sample costs are presented. A methodology that estimates initial and operating costs on the basis of this analysis is presented. The methodology also estimates the average lifetime cost of owning and operating an electric vehicle. xii

World Electric Vehicle Journal

This paper analyses how the total cost of ownership (TCO) of electric light commercial vehicles change with the number of kilometers driven, the period of ownership, the residual value of the battery, and different fiscal incentives, as well as a kilometer charging scheme. This paper demonstrates that a kilometer-based charge and reduced fiscal incentives for conventional vans can drastically improve the TCO of electric commercial light duty vehicles. Second life applications for batteries could also have a strong impact on the TCO of electric vans as they could retrieve a better residual value. Finally, the paper shows that the TCO of electric vans can be optimized based on its usage. These are important findings given the ambitious objective of carbon free city logistics by 2030. Adoption of electric vans remains very low and this paper offers an up to date analysis to stimulate the electrification of light commercial vehicles, a segment that is growing fast in city logistics.