On Modeling the Total Cost of Ownership of Electric and Plug-in Hybrid Vehicles

Sales of plug-in vehicles (PEVs), which include battery-only electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs), have steadily grown in the past years amidst various incentive programs. While incentives are important, or perhaps essential during early phases of market introduction, they may not be feasibly sustainable when/if PEV sales ramp up to mass-market levels. As such, much interest and speculation exist on how soon could PEVs become cost-competitive without incentives. Research in this paper adopts a bottom-up approach for estimating sale price and total cost of ownership (TCO) for new vehicles. A critical review is also conducted for various publicly available sources of information pertaining to PEVs and conventional internal combustion-engine (CICE) vehicles. Due to the existence of some uncertainty about current costs, let alone future costs, a sensitivity analysis is conducted. In the various scenarios considered in the sensitivity analysis, a combination of cost predictions being better than the baseline case may allow some of the PEVs to have better TCO than a CICE within the 2030 timeframe. However, even the most optimistic scenarios considered did not show PEVs reaching purchase price parity by 2030 compared to a CICE.