## EPRI: lifetime cost of ownership of plug-ins is roughly comparable with conventional vehicles

##### 11 June 2013

Consumers who purchase an electric vehicle will find that lifetime costs to own the vehicle are competitive with conventional and hybrid vehicles, according to an analysis conducted by the Electric Power Research Institute (EPRI). The study is based on pricing for the automotive products for the 2013 model year.

The baseline analysis relies on a cost-of-ownership model that examines only current vehicles; current fuel prices; and a relatively conservative set of customer values. In particular, the report analyzes the Chevrolet Volt and Nissan LEAF in comparison with a limited set of current conventional and hybrid vehicles. The EPRI analysis focused on the LEAF and Volt because the plug-in vehicles have been on the market the longest, have generated the greatest sales volume and provide data on real-world performance.

Given the cost premium associated with PEVs [plug-in vehicles], there is considerable uncertainty about how sales will evolve over time. This EPRI report attempts to address one of the key questions surrounding the acceptance of PEVs in the marketplace: When compared to a hybrid or conventional vehicle, is a PEV worth the additional up-front cost to consumers?

This question is difficult to answer due to significant differences between PEVs and conventional vehicles that affect how they will be perceived and used by customers. PEVs are typically plugged in at home and charged overnight instead of being refueled at a gas station, so they are typically more convenient than conventional cars for short range driving. However, they can be relatively inconvenient for long-range driving, depending on the vehicle design. An investigation of conventional tools and methods for evaluating customer valuation of vehicle technologies showed that existing tools were inadequate for analyzing the differences between conventional vehicles and PEVs. This report describes the development of and initial results from a cost-of-ownership model created to analyze the impact of these differences.

—“Total Cost of Ownership for Current Plug-in Electric Vehicles”

The EPRI analysis does not attempt to model customer adaptation; it does use data that is new to EPRI transportation modeling in order to estimate the range of values for customers with different driving patterns.

Following are key results of the analysis:

• With current incentives and prices, financial factors should not be a deterrent to a PEV purchase for most buyers. In terms of both total lifetime costs and monthly outlay, PEVs are typically within +/- 10% of comparable hybrid or conventional vehicle options. Because increased capital costs are well balanced by operating cost savings, the decision to purchase a PEV can usually be made based on personal values rather than financial limitations, assuming that the purchase of any vehicle is within a customer’s financial capabilities.

However, the analysis revealed that some drivers have driving patterns that are poorly matched to the characteristics of a given PEV and would experience a negative impact from a PEV purchase.

• The LEAF is less expensive than competing options on average, but has a wide variation in value for different drivers, suggesting that battery-electric vehicles will require more careful consideration when making a purchase decision. In the worst case, the Volt can be operated in hybrid mode with roughly the same range and usage characteristics as other hybrid vehicles, so the risk of a significant negative impact is relatively low.

Because the LEAF is a battery-electric vehicle, it has a fixed range limitation that may result in significant cost or inconvenience for some customers given current charging availability. However, the relatively low capital costs for the LEAF and very low operating costs mean that well-matched drivers can incur substantially lower costs with the LEAF than other available options.

These variations suggest that tools to help inform customers of potential savings will be particularly important for battery-electric vehicles. Additionally there appears to be significant potential for customers to affect their ownership costs through adaptation.

• The sensitivities suggest that increases and decreases in gasoline prices will have a significant impact on the relative costs of PEVs, but that state incentives or rebates and equivalent vehicle price changes will have an even larger impact on cost tradeoffs. The analysis indicates that capital costs and operating costs are reasonably well balanced at the current time for most vehicle comparisons.

Changes in the price of gasoline will affect this balance and will cause significant changes in payback time, but will result in relatively small changes in total ownership costs or monthly expenditure. Favorable state incentives or equivalent changes in capital costs for vehicles will have a larger impact than fuel prices, significantly improving payback time, total ownership cost, and monthly expenditure.

The study assesses both cash and financed purchases for electric, hybrid and conventional vehicles. The monthly outlay during the loan period is is a key indicator of affordability and may obscure the overall cost-competitiveness of vehicles for the life of the vehicle or the entire time of ownership.

The report also finds that lifetime costs for the Volt are close to the comparison conventional vehicle and comparison hybrid, indicating that increased up-front costs are offset by fuel savings. The variation in costs is relatively low between the best-matched and worst-matched, at about 5%. This makes the Volt a low-risk cost option for buyers interested in a plug-in electric vehicle (PEV).

Our analysis indicates that capital costs and operating costs are reasonably well balanced at the current time for most vehicle comparisons. Changes in the price of gasoline will affect this balance and will cause significant changes in payback time. Favorable state incentives or equivalent changes in capital costs for vehicles will have a larger impact than fuel prices, and will significantly improve payback time, total ownership cost, and monthly expenditure.

—Dr. Mark Duvall, Director of Electric Transportation research at EPRI

Resources

My calculations show that a LEAF with the federal subsidy is $2,000 less to own and operate over a 12 year period than a Nissan Versa. And that a LEAF is$8,000 less to own and operate over a 12 year period than a Toyota Prius.

The differences are probably greater as I did not include ICE maintenance and more frequent brake repairs.

Throw in state subsidies and the differences are even larger.

BW...have you assumed that liquid fuel price will go up at an average estimated rate of about 8% per year for the next 12 years and that Fed and States fuel taxes may also go up?

On the other hand, our Hydro e-energy price is going up much more slowly (about 2%/year or not at all)

Considering that liquid fuel price will go up more than e-energy in most regions; that BEVs currently cost less to own and operate than equivalent ICEVs; that future BEVs will cost less and have higher performances (range etc); future BEVs will cost even less to operate than ICEVs in the future.

I have seen no mention of the additional taxes being imposed in some states in the US , and planned in other states to compensate for using less fuel for, BEV,s HEV,s and PHEV,s. That should be included into the equation.

While it is good news that BEV's or PHEV-40 have comparable cost to their ICEV's counterpart, HEV's or PHEV-20 will save owners 5-10k USD over the life of the cars, according to many of my previous calculations.
This is because of the price of the large battery packs that cannot realize their full number of charging cycles before calendar life degradation will take place. HEV's or PHEV-20's, with smaller packs, will cost less and can realize the pack's full number of potential charging cycles, hence will result in significant cost savings for the owners over the life of the cars. Wonder if they have already factored in the lower maintenance and repair costs of EV's vs ICEV's?

I didn't see any mention of depreciation in the cost models. Resale value has an impact on many new vehicle buyers purchase decision. Likewise, the majority of vehicles sold are purchased used so understanding the payback of the used vehicle without incentives is important for the majority of conservative buyers.

What I'm trying to say and understand is how would each of the vehicles analyzed have fared had they used cost models based on vehicles purchased when they were 3 years old. To keep it simple, use a cash purchase for comparison.

Does anyone know if such a study has been done?

Make some calculations $4,000 lower than comparable with conventional vehicles - http://www.freep.com/article/20130610/BUSINESS0101/306100100/chevrolet-volt-nissan-leaf-tesla-model-s Now, C-Max etc.. w/only a 20 mile battery needs a few thousand reduction.. Also, the finance side of the equation did not account for price cuts and lease deals such as: http://www.mlive.com/auto/index.ssf/2013/06/gm_offering_up_to_5000_incenti.html "the price of the large battery packs that cannot realize their full number of charging cycles before calendar life degradation will take place." When it's time for a new car you remove the pack and set it to work doing something else - like storing energy from your home's RE system. Fun with statistics 101. Did any actually read the report? The first thing you do is bias the assumptions. “24 mpg, 150k vehicle lifetime ” I had no problem finding a nice reliable car that get 35 mpg and will last 300k. “$25k average price”

Who pays that much for a Civic or VW?

“Bluetooth”

It does not surprise me that fools and their money are soon parted. So no, you can not save money with a BEV if you make good choices. BEV are among the many bad choice you can make when buying a car.

And not a single word from EPRI about how electric cars emit more CO2/mile than equivalent hybrids. I guess the Electric Power Research Institute just wants to sell more fossile electricity, does it not?

By the way, here is a new report that confirms that Prius is better than Leaf in 36 out of 50 states of the US. If we stop pretending that each state has its own grid mix, Prius is of course ALWAYS better.

Interactive report:

http://www.climatecentral.org/news/climate-friendly-cars

Full report in pdf format:

http://www.climatecentral.org/wgts/leafapp/Climate_Friendly_Cars_2012.pdf

KP, "I had no problem finding a nice reliable car that get 35 mpg and will last 300k." - Statistically. your about the only one.

Of course, this "electric vehicle will find that lifetime costs to own the vehicle are competitive with conventional and hybrid vehicles" is from the Electric Power Research Institute (EPRI) and who trusts power companies..

Jus7tme, solar electricity powered EVs are most climate friendly in 50 of 50 states, growing, and cheaper http://cleantechnica.com/2013/06/10/the-coming-solar-electricity-transformation/

@KP, check the title. Who trusts your EPRI people..

Harvey - no, I used 3% inflation for both fuel and electricity.

Trevor - it's way too early to tell how the resale market will treat EVs and PHEVs. We might guestimate that they will be treated kindly. There seems to be some data that fuel efficient cars hold their value better than gas guzzlers.

If you project ahead, a six year old EV could save its driver a grand or more a year in fuel. A thoughtful person with a tight budget would pay something extra for the lower operating costs.

Kelly,

Solar electricity is fine and dandy, but we will emit less CO2 by using solar electricity to DISPLACE fossile electricity rather then by diverting the solar into nerw demand from electric cars. THAT is the point. Read the report.

we will emit less CO2 by using solar electricity to DISPLACE fossile electricity rather then by diverting the solar into nerw demand from electric cars.

We can't do both? Since most vehicles are parked an average of 95 percent of the time, the batteries of plugged in BEVs could be used to store solar/wind electricity for when generation is low.
http://en.wikipedia.org/wiki/Vehicle-to-grid

BTW, this also takes care of Roger's 'the battery's too big' problem.

Roger:
Perhaps you would link the report giving the data for calendar life on which you base your claims.
I am aware of no such information.

Indeed, the only information I have seen looks to use Leaf and other batteries for second use, after they are too depleted for use in cars.

Calendar life degradation will also presumably vary according to the chemistry used.
I know that Toshiba with their lithium titanate battery are quite happy to talk about 20 year lifespan.

Of course, some individual modules using any chemistry may need replacing, but I am not aware of any data giving grounds for your pessimism.

Roger Pharm,

I do not think that is reasonal consideration investing into PHEV-20 instead of PHEV-40. Price diference between those two option is very marginal, because all electrical systems are the same. Just 5 kWh battery storage which gives max. $2000 teoretical diffence. In reality the smaller battery you have the higher exposure to degradation therefore more strict requirement to the chemistry, TMS and power density (kW/kg). The smaller battery the higher requirement to ICE and torque. Therefore IMHO PHEV 20 has no manufacturing cost advantage over PHEV 40 and in reality is half product. Moreover 20 miles AER in summer means 14 miles in winter. Chevy Volt OnStar data demonstrates that even 40 miles AER not utilizing full daily commute potential taking into consideration winter AER reduction. Therefore real PHEV is in range between 40 and 60 miles AER (summer). 20 miles simply not making any sense. IMHO PIP was released trying make as little as possible changes to the Prius hybrid fitting into existing platform. In case the PIP development start today may be we would see differnt product. Price differnce between PIP and Chevy Volt is not due drivertrain diffences but due to very old established Prius platform and costs required for new platform development of Chevy Volt. Besides PIP is more econobox when Chevy Volt is fancy compact and that makes cost differnce as well. “Prius is of course ALWAYS better ” Better how? This report is about cost. EPRI did not compare the cost of a Corolla. If you are really worried about climate drive less and build more nuke plants. “check the title ” Actually I read the report. It would appear that EPRI is as good at making up stuff as Roger. Experience is the reason that I know what it cost to buy a Corolla, the mileage it gets, and the cost of maintenance. There is a reason so many people buy a Corolla, the good experience they have. When I look at a graph that says a BEV will save money but the excludes the kind of car that people who make choices based on economics not marketing; the report is just silly. just7me, "Solar electricity is fine and dandy, but we will emit less CO2 by using solar electricity to DISPLACE fossile electricity rather then by diverting the solar into nerw demand from electric cars. THAT is the point. Read the report." People install EXTRA solar panels to cover the consumption of their EV. Extra PV capacity that would not have been installed if they had continued driving a Prius. It is not attractive to install these solar panels anyway (without EV), since what you get for a surplus of PV electricity you feed into the grid is next to nothing. When combining the purchase of an EV with solar panels the extra net demand on the grid is close to 0. Iirc, the number is ~40% of EV buyers that also install PV. Furthermore, in areas of high wind penetration strong winds at night can cause curtailment because there is a lack of demand. With EV's charging at night, this energy that would otherwise have been wasted can be used. It gets even better if the power companies can throttle the charging speed. This gives them a powerful tool to manage supply/demand. And lastly, EV is a technology still in its infancy. Renewable energy is perhaps slightly more mature. These two technologies will take at least until 2050 to fully develop. That is something that has to occur in parallel. And no, you can not say "Ok folks, continue driving your Priuses, while we develop the perfect EV in the lab". Developing a new technology has to be done in the real world. All technologies were developed that way. First release what you got, then build a new generation of products on the experiences of the previous generation. That's another strong motivation for buying an EV now. It helps develop the technology that we will need 20,30 years from now. Car tech is slow to develop, incomparable to consumer electronics. Jus7tme, your new report is in error. According to the DOE it takes 6kwhr of electricity to produce one gallon of gas, so I can drive my EV ~25 miles JUST ON THIS, not counting all the NG and other resources consumed to bring this gallon to market. All these studies are biased by not counting upstream emmisions. Bottom line EVs are ~4X as efficient as ICE so they are cleaner now, and unlike ICE cars they get cleaner as they age (because the grid gets cleanr). http://www.businessweek.com/articles/2013-05-13/adding-an-electric-car-cut-the-payback-point-of-our-solar-panel-investment-in-half And PV is now over ten percent less expensive than in 2011.. Our pro-oil opposition parties voted against a 1.9% rise in Hydro electricity tariffs to support ground vehicles electrification program and more wind power units. A recent survey found that over 60% of the population is in favor of the program but Right Wing Parties are not. They will not bit the hands that supply the funds for their next campaign. It is a sad day when Oil$ dictates the use of fossil fuels in the land of huge clean Hydro electricity surpluses? It makes you wonder where real Democracy went? Will the new Moneycracies do better our will we have more Turkey, Greece, Spain, Syria, Egypt, Tunisia, Libya, Lebanon, Irak, Iran, Afghanistan etc

Current style Democracies are very hard to sell? It is loosing most of its appeal?

And speaking of EV's & V2G; http://www.greencarcongress.com/2013/06/seat-20130612.html

And of course THAT car comes from Spain where; http://cleantechnica.com/2013/05/08/fifty-four-of-spains-electricity-generation-in-april-from-renewables/

We could plug in during the day and charge from solar panels. But plugging in at night and charging from wind turbines probably is a better idea.

Wind is cheaper than solar, about 2x cheaper at the moment and likely to stay cheaper.

Wind tends to produce electricity during times of lower demand and that means that it has "less value" to the grid. By charging at night we create a new market for off-peak electricity and increase profits for wind farms.

Better profits means more investment in wind farms which means more wind on line during peak demand hours. That brings down the overall cost of electricity which benefits everyone. (Except the owners of thermal plants.)

Put panels on your roof. Send the power to the grid to help with peak demand. Take back power from wind turbines for charging. You still save a bundle and everyone's electricity costs drop.

The comments to this entry are closed.