Total cost of ownership (TCO) studies are generally used as a tool to understand how and when the plug-in electric vehicle (PEV) technology will reach cost parity with conventional fuel vehicles. Post cost-parity, the PEV market should be able to sustain without government intervention. The researchers present here a detailed analysis of vehicle manufacturing costs and market-level TCO accounting for technology uncertainties, behavioral heterogeneity, and key decision parameters of automakers. Using the estimates of the vehicle manufacturing costs, they estimate the cost of electrification of California’s LDV fleet to achieve the state’s net-zero emission goal by 2045. The results suggest that PEVs may not be cost-competitive even in 2030 without stronger policy support and automakers' initiative. Moreover, TCO is not a single number and the cost of electrification will vary across the population based on the cost of vehicles available in the market, their charging capabilities at home and public, and energy costs. The TCO estimates and the cost of fleet electrification analysis not only has important implications for policymakers but can also offer a foundation for understanding the effect of market dynamics on the cost-competitiveness of the PEV technology.
The data for Total cost of ownership was collected from academic research on the topic, technical reports from the industry, and data on vehicle technology maintained by the Environmental Protection Agency (EPA) and the Alternative Fuel Data Center.
The household-level data used for market segmentation is obtained from the 2019 California Vehicle Survey hosted by NREL.