The article is from the public number: 2030 Travel Lab (ID: PHD2030MRL) author: Dong Yao (University of California, Davis transport technology and policy professional PhD, principal research directions for the electric commercial vehicle Of peak car ownership, etc.), original title is: “Do electric vehicles need subsidies? “Analysis of the Cost of Owning Electric Vehicles in the United States”, the title map comes from: Visual China.
With the decline of subsidies for new energy vehicles in China, potential consumers of electric vehicles are facing higher costs than fuel vehicles, which is reflected in sales volume. In recent months, electric vehicle sales have continued to decline. How much is the difference between the cost of fuel vehicles and electric vehicles, and under what conditions can the costs be competitive? Some electric vehicle supporters have suggested that despite the high purchase price of electric vehicles, lower fuel costs and maintenance costs can make the total life cycle cost of the vehicle almost equal to that of fuel vehicles. Is this statement true?
To share with you here a Case study based on the analysis of the total cost of ownership of fuel vehicles, hybrid vehicles and electric vehicles in 14 cities in the United States , we will jointly consider what policies are needed to promote electric vehicles stand by. Of course, the situation in American cities is not completely the same as in the country.
Brief summary:
Based on the analysis of the full life cycle costs of Nissan Listen, Toyota Prius and Toyota Larolla based on the 14 major urban areas in the United States, due to differences in subsidy policies, consumption tax, insurance, oil prices, travel mileage, etc. in different regions, they differ The costs of electric, hybrid, and traditional car consumers in the region are different. The cost of owning a car in the city with the highest cost is nearly 20% higher than that in the city with the lowest cost.
However, in almost all cities in the United States, the high purchase price and rapid depreciation cost of electric vehicles exceed the savings brought by their fuel costs. Sensitivity analysis shows that federal and state government subsidies are still necessary to maintain the competitiveness of electric vehicles. In the future, as the price of electric vehicles decreases, it may be competitive with the cost of fuel vehicles. However, in the analysis of this article, only in the most optimistic scenario design Or low prices, high gas prices, and long mileage).
Introduction
This article is intended to answer two questions:
Based on actual consumer purchase and use costs from 2011 to 2015, have electric cars saved consumers money?
How important is the government subsidy for the competitiveness of electric vehicles compared to fuel vehicles?
This article analyzes the cost of three models: Nissan Listen (electric), Toyota Prius (hybrid), and Toyota Corolla (fuel) in 14 major US cities.
Cost includes purchase cost, vehicle mileage, fuel price, insurance costs, maintenance costs, taxes, fees, subsidies, and vehicle resale prices. In the sensitivity analysis, by exploring changes in oil prices, discount rates, depreciation rates, car ownership time, mileage, etc., to test whether Nissan Leifeng can achieve cost competitiveness without federal and state government subsidies.
The study found that Despite differences in the cost of each city, Nissan Levan ’s full life cycle cost is still higher than that of Toyota Corolla due to differences in purchase prices and resale prices, and government subsidies remain competitive in maintaining Nissan Levan Very necessary.
Full cost analysis is commonly used in the field of automotive research to analyze the full life cycle cost comparison of different fuel vehicles. However, due to different considerations, the methods and results of full cost analysis may vary greatly.
For example, in terms of the types of costs covered, some studies only consider purchase and use, and do not consider taxes or government subsidies; some have set the salvage value of all vehicles to zero. The length of ownership is linearly depreciated, and some are depreciated linearly according to the mileage. Some studies choose a longer period of ownership, such as 10 years, 12 years, or even 20 years, and some have a shorter period, and choose 6 or 8 years. It was found that out of 44 studies, only two covered all related costs of vehicle and battery purchases, fuel, charging infrastructure, maintenance, insurance, taxes, and resale or residual value credits.
This analysis compares the most popular ICEVs, HEVs, and electric vehicles based on US sales: Toyota Corolla, Toyota Prius, and Nissan Listen. The analysis uses the 2011 model year, which is the first year of the listing of Lingfeng, and provides complete five-year data. In estimating the new and used values, we specified a centerpiece model with comparable functions (La Rolla LE, Prius II, Listen Wind SV) . The five-year ownership period for this study covers fiscal year 2011-2015, which is the purchase of a new car in July 2011 and the sale to the used car market in June 2016. Accounting fiscal year is used here (July to June) to ensure that the $ 7,500 federal tax credit is calculated in the first year of ownership and is not discounted.
This study analyzes the monthly U.S. Bureau of Labor Statistics (BLS) report on 14 gasoline and electricity prices in the U.S. metropolitan area: Atlanta Boston, Chicago, Cleveland, Dallas, Detroit, Houston, Miami, Los Angeles, New York, Philadelphia, San Francisco, Seattle, and Washington DC.
Because there are differences in the initial and resale prices of vehicles, local subsidies, tax refund policy settings, and local electricity prices, oil prices, and vehicle mileage, the selection of these typical regions can represent and reflect regional differences. .
Full cost analysis model:
where PP is the purchase price, STX is the purchase tax, TF is the registration fee, TXC is the tax credit, N is the car ownership period, and F is the yearly fuel Cost,
TX is the current tax, I is the annual insurance cost, MR is the annual maintenance cost, RV is the resale price, and r is the discount rate.
Full cost analysis results:
Figure 1 5 years of total vehicle cost in 14 cities
First, Regional differences in policies, driving behavior, and operating costs have led to very different total cost of ownership across cities. Corolla’s five-year total cost ranges from $ 25,177 to $ 29,078; Prius is $ 28,237 to $ 31,875; and Wind is $ 30,061 to $ 36,899. The cost of owning a car in the most expensive cities is nearly 20% higher than in the least expensive cities. Tax policies and purchase incentives are the main sources of change in the cost of ownership.
Second, In spite of this difference, in all cities, even if there is a large amount of electric vehicle subsidies or has great fuel saving potentials (High gasoline prices or VMT) Where the cost of listening to wind is also significantly higher than all Corolla . Assuming an average electricity price, the average price of Lingfeng is $ 6,561 higher than Corolla.
Third, In addition to a city, the price of listening wind is higher than Prius . Assuming average electricity prices, Lingfeng averaged $ 3,520 more than Prius over five years. After adding a large number of state subsidies to the federal subsidy, Hearing can compete with Prius.
These findings contradict the view that car owners expect to save money by purchasing electric vehicles.
Baseline results show that in 2011, “typical” new car buyers owned a new car for five years, sold it under average conditions, traveled an average distance, and paid the average fuel price. Rolla or Prius can save thousands of dollars. Without a federal tax credit of $ 7,500, Windwind’s cost competitiveness is not high.
Discussions around electric vehicles usually focus on fuel cost savings, but the fuel cost savings of listening to wind are negligible unless the car owner can enjoy the opportunity of low prices or free charging. Assuming an average electricity price, within five years, Listening saved $ 3,102 in fuel costs compared to Corolla and only $ 899 in fuel costs compared to Prius. In cities with high electricity bills, listening to the wind costs almost as much as refueling a Prius in terms of average electricity prices.
The main part of the difference in cost of ownership is not the difference in fuel costs, but the difference in capital.Cost-driven .
Even though it received a federal tax refund of $ 7,500 and even state subsidies, Lingfeng’s net capital cost is relatively high. An important but often overlooked factor is the acquisition tax. Many TCO studies have not considered the higher purchase tax costs resulting from the higher market price of electric vehicles. However, at an 8% tax rate and an additional $ 15,000 in price, it would mean an additional $ 1,200 in purchase tax, which would be enough to offset fuel savings for several years.
A more important factor in the cost of net capital is vehicle depreciation. Most TCO studies either ignore depreciation or assume that the depreciation rate for various models remains the same. However, this study found that cars Resale price difference of vehicles is the main determinant of car ownership cost for five years ——
The five-year resale price of Corolla is nearly 45% of the original price, the Prius resale price is 40% of the original price, and the resale price of Lingfeng is only 16% of its original sale price after 5 years text-remarks “label =” Remarks “> (23% of net purchase price after federal tax credit) . There are many reasons for the rapid depreciation. For example, second-hand car owners cannot get tax deductions. Second-hand car owners may expect to replace the battery within a few years. Rapid innovation in vehicle and battery technology may reduce demand for older electric vehicles.
Sensitivity analysis
Sensitivity analysis chooses the cost influencing factors (oil price, electricity price, mileage, service life, discount rate, etc.) to simulate different scenarios, To analyze the total cost changes that these factors may bring. Here, we only briefly describe the changes in oil and electricity prices.
Figure 2 Comparison of total costs based on different scenarios of oil and electricity prices
Based on the comparison of “actual” oil prices, “stable” oil prices, “growth” oil prices, “swelling” oil prices, zero electricity prices, and average electricity prices, the total cost comparison results are shown above. Br
Under the average price of electricity, regardless of the price of gasoline, compared to Corolla and Prius, the average cost of listening to wind is still much higher. Even in the “surge” scenario, the average price of the listening wind is $ 1,500 higher than Corolla. Compared with Prius, the “surge” solution enables Lingfeng to achieve savings in three cities, but in the other 11 cities, as long as consumers pay the average electricity price, even in the “surge” scenario, they can only compare Lingfeng to Prius The total cost was reduced from the original $ 4,445 to $ 2,787.
With free electricity prices and “actual” or “stable” gasoline prices, the cost of listening to wind is always higher than Corolla. When free electricity was combined with the “increasing” scenario of gasoline prices, Lingfeng was hundreds of dollars cheaper than Corolla in both cities and reached an average price in Seattle. The listening to free electricity is advantageous over Prius: the average cost premium for “real” gasoline prices is $ 1,021, while the average cost premium distributions for “stable”, “growth” and “surge” oil prices are 605, 618 and $ 292.
In the city with the highest subsidy, in the case of all gasoline prices, Lifan can save $ 500 for free electricity, and in the case of soaring gasoline prices, Lifeng saves $ 2,000-4,500 . In cities with moderate subsidies, the free-powered Powerwind has reached cost parity, saving about $ 400–1,200 in the case of “growth” or “surge”. In less subsidized cities, Lingfeng reaches cost parity only under “growth” or “surge” conditions. Finally, in cities without a national electric vehicle subsidy, free electricity reduces the cost premium for listening to wind, but even with the “surge” in gasoline prices, it can’t keep it equal to the cost of Prius.
The results of other sensitivity analyses show that The change in discount rate has little effect on the relative cost relationship. This is caused by two aspects. First, the increase in discount rate reduces the fuel of electric vehicles and hybrid vehicles. The benefits of cost savings, but at the same time, the increase in the discount rate also reduces the impact of resale prices on total costs.
Analysis of mileage changes shows that taking Los Angeles as an example, the average oil price and average electricity price are calculated.Wind and Corolla cost parity requires annual mileage of 37,138 miles, and Wind and Prius cost parity requires annual mileage of 135,074 miles.
Conclusions and policy recommendations
The full cost analysis of this study shows that Due to the differences in vehicle prices, subsidies, taxes, and average mileage of vehicles in different regions of the United States, the total life cycle costs vary greatly. The energy cost savings of electric vehicles cannot offset the total cost difference caused by the difference in initial selling price and residual value. In most cities and scenarios, electric vehicles still have higher life cycle costs than traditional and hybrid vehicles. Except for the most optimistic scenario, (high oil price, low electricity price, long driving mileage) , it is difficult for electric vehicles to obtain cost competitiveness without subsidies.
Because the electric vehicle analyzed in this article is the initial model of Lingfeng, with the technological innovation and scale, the purchase price of electric vehicles may decrease and the cost competitiveness may increase. At present, automakers are mainly using innovation gains to launch larger batteries rather than lower purchase prices, which may affect the cost competitiveness of electric vehicles.
During the gradual reduction or cancellation of large-scale subsidies, policy makers should not only focus on direct subsidies, but also consider reducing the price-based tax of electric vehicles. (such as acquisition tax, property tax) the tax rate or taxable value . At the same time, in addition to such “carrots” of incentives, there may also be regulatory “sticks”, such as corporate average fuel economy standards and zero-emission vehicle regulations, which can drive car manufacturers to increase and reduce the supply of electric vehicles Vehicle prices, fuel taxes, carbon taxes and other related taxes that reflect the negative externalities of fuel vehicles will also increase the cost competitiveness of electric vehicles.
References:
1. Jorg Roosen, Wim Marneffe, and Lode Vereeck, “A Review of Comparative Vehicle Cost Analysis,” Transport Reviews35, no. 6 (November 2, 2015): 720–48, https://doi.org/10.1080/01441647.2015.1052113.
2.Breetz, Hanna L., and Deborah Salon. “Do Electric Vehicles Need Subsidies? Ownership Costs for Conventional, Hybrid, and Electric Vehicles in 14 US Cities.” Energy Policy 120 (September 1, 2018): 238–49. Https://doi.org/10.1016/j.enpol.2018.05. 038.
3.Roosen, Jorg, Wim Marneffe, and Lode Vereeck. “A Review of Comparative Vehicle Cost Analysis.” Transport Reviews 35, no. 6 (November 2, 2015): 720-48.
https://doi.org/10.1080/01441647.2015.1052113.
The article is from the public account: 2030 travel Research (ID: PHD2030MRL) , author: Dong Yao (University of California, Ph.D. in Transportation Technology and Policy, Davis. His main research directions are commercial vehicle electrification, peak car ownership, etc.).