Electric vehicles: the total cost of ownership is lower, but the merit is government contributions

A new study published on Applied Energy tries to compare TCO (Total Cost of Ownership – total cost of ownership that takes into account all the costs of purchase management and maintenance) of an electric vehicle (in the hybrid versions, plug-in hybrid and fully electric) with that of a traditional petrol-powered vehicle based on a statistical analysis conducted over a period between 1997 and 2015 in various geographical areas and taking into account an average annual mileage for each area, and a maintenance cost annual average for each region.

The study compared the TCO of a Prius, a Prius Plug-In and a Nissan Leaf with that of a Toyota Corolla in Japan, California and Texas and a Ford Focus in the United Kingdom. A first verdict is that the costs were lower for electric vehicles thanks to fewer brake wears and fewer moving parts.

In 2015, electric vehicles in all four geographic areas were found, again in terms of TCO, slightly cheaper than vehicles with a combustion engine, and in particular, vehicles based on a purely electric engine were the cheapest.

On the other hand, the TCO of hybrid motor vehicles is higher compared to traditional motor vehicles because in any case, it is used equally fuel, and because they are subject to less substantial purchase incentives. Plug-in hybrid vehicles are the most expensive in all regions, except in Japan where they are subject to more generous subsidies.

There is a great though: the study shows that it is precisely the contributions made by the various governments to represent the most consistent reason for which the TCO of electric vehicles are lower than those with traditional combustion engine, contributions that inevitably will not exist forever: in the US, for example, government subsidies will begin to be progressively reduced when any one of the car manufacturers will reach the goal of 200 thousand electric cars sold. A milestone that will probably be reached in the course of 2018 by Tesla.

It is good to bear in mind that the results of the study could give non-significant indications if they are considered in the context of other geographical areas, since purchase prices and subsidies vary considerably from market to market. And of course the TCO for the individual also varies based on the annual distance: the longer it is extended, the greater the advantage for an electric vehicle.

Another point of attention is that the data of this study date back two years and since then the prices of electric vehicles have dropped quite sensibly, and the study finds that the TCO of electric vehicles has decreased in the period between the introduction of the cars on the market and 2015. Obviously, the most expensive element of an electric car compared to an automobile with an internal-combustion engine is the battery, and it is precisely the cost of this component that is falling rapidly.

An analysis by Bloomberg estimated that batteries for electric vehicles had an average cost of $ 273 per kWh in 2016, compared to $ 1,000 per kWh calculated in 2010. According to some analysis, the point at which electric vehicles can achieve parity of TCO with petrol engine vehicles, without government incentives, is a battery cost of $100 per kWh, likely to be reached in the coming years.