On the economics and the future prospects of battery electric vehicles

Abstract

Currently, the electrification of passenger cars is seen as one of the key strategies for heading toward a sustainable transport system. Of special interest are battery electric vehicles (BEVs), which can enable significant emission reductions if electricity used is produced from renewable energy sources. However, mainly due to their high investment costs (retail purchase price) of BEVs, they are currently not economically competitive with conventional fossil-fueled vehicles without different supporting policy measures. This paper analyzes current costs and future prospects for BEVs compared to conventional petrol cars looking at the total costs of ownership. Furthermore, the future prospects are investigated considering technological learning for BEVs, CO 2 taxes for fuels, and various other policy framework conditions such as rebates for the purchase of the BEVs. The major conclusions are as follows: (i) to improve the economics of BEVs, a very important aspect is the introduction of CO 2-based fuel taxes; (ii) regarding economics, the second important aspect is the reduction of the investment costs of the BEVs due to technological learning, especially of the battery; (iii) in addition, the introduction of CO 2-based registration taxes for the purchase of passenger cars makes sense; (iv) subsidies or rebates for the purchase of a BEV maybe a measure successful in the short term and helpful to stimulate technological learning; (v) by far, the highest uncertainty regarding the future prospects of BEVs is how fast technological learning will take place, especially for the battery, and how the future development of batteries will be.

How Policies Affect the Dissemination of Electric Passenger Cars Worldwide

“…Because this is a problem again concerning regulation, it means the involvement of policymakers. (vi) The relevance of the energy source for electricity generation: Regarding the environmental performance of any type of E-Mobility, the most crucial question is from which source the electricity used is generated and how this mix will develop in the future [19]. With the promotion of renewable energy and RES, electricity becomes as environmentally clean as possible, but again, this is largely a political decision.…”

“…This period also covers the warranty period for a battery for driving distances between 80,000 and 24,000 km. An interest rate of 5% is assumed, as this is a standard interest rate from a bank loan [19].…”

“…Policy instruments to promote E-Mobility[19,[22][23][24][25][26][27][28][29][30][31][32][33][34][35].…”

The impact of COVID‐19 on the market prospects of electric passenger cars

“…In literature, different aspects of e‐mobility have been analyzed. In recent years, special focus was put on different types of electric vehicles (Ajanovic, 2015 ; Iclodean et al, 2017 ) and their economic (Ajanovic & Haas, 2020 ; Bubeck et al, 2016 ) and environmental assessment (Ajanovic & Haas, 2019a ; Moro & Lonza, 2018 ). Many papers have stressed the importance of increasing the use of renewable energy sources (RES) in the transport sector and hence, ensuring that the electricity used in battery electric vehicles (BEVs) is generated from RES.…”

Renewable energy systems implementation in road transport: prospects and impediments

“…Some of the papers are focusing on the use of electric vehicles in urban areas [26][27][28]. Many authors have conducted environmental assessment of emobility [29][30][31]. However, due to changeable policy framework and technical improvements the discussion on all alternative fuels and alternative automotive technologies started again.…”