Battery electric vehicles now close to total ownership cost parity with ICE vehicles say researchers
Sat 02 December 2017 | Back to news list
A new study by researchers at the University of Leeds finds that financial subsidies have enabled battery electric vehicles to reach cost parity with conventional ICE vehicles in terms of Total Cost of Ownership (TCO) in the UK as well as in parts of the USA and Japan.
The study, published in the journal Science Direct, by researchers from Leeds' Institute for Transport Studies, also found that new powertrain technologies, such as hybrid electric vehicles, have a price premium which can often be offset by lower running costs. The study compared the TCO of conventional, hybrid, plug-in hybrid and battery electric vehicles in three industrialized countries – the UK, USA (using California and Texas as case studies) and Japan – for the time period 1997–2015.
In all regions the researchers found that the incremental TCO of hybrid and electric vehicles compared to conventional vehicles has reduced from the year of introduction and since 2015. Year-on-year hybrid electric vehicles' TCO was found to vary least in the UK due to the absence of subsidies.
The researchers found that financial subsidies have enabled battery electric vehicles to reach cost parity in the UK, California and Texas, but this is not the case for plug-in hybrid electric vehicles which, they say, haven’t received as much financial backing.
The researchers point out that the findings have implications for fleet purchasers and private owners who are considering switching to a low-emission vehicle as well as to policymakers seeking to develop effective measures to stimulate fleet decarbonisation and improve air quality.
The study analysed the total cost of ownership of cars over four years, including the purchase price and depreciation, fuel, insurance, taxation and maintenance. They were surprised to find that pure electric cars came out cheapest in all the markets they examined: UK, Japan, Texas and California.
James Tate, one of the report authors from the University of Leeds said (reported in The Guardian): “We were surprised and encouraged because, as we scale up production, [pure] electric vehicles are going to be becoming cheaper and we expect battery costs are going to fall...It is a really good news story.”
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