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Cost-effectiveness of plug-in hybrid electric vehicle battery capacity and charging infrastructure investment for reducing US gasoline consumption


  • Peterson, Scott B.
  • Michalek, Jeremy J.


Federal electric vehicle (EV) policies in the United States currently include vehicle purchase subsidies linked to EV battery capacity and subsidies for installing charging stations. We assess the cost-effectiveness of increased battery capacity vs. nondomestic charging infrastructure installation for plug-in hybrid electric vehicles as alternate methods to reduce gasoline consumption for cars, trucks, and SUVs in the US. We find across a wide range of scenarios that the least-cost solution is for more drivers to switch to low-capacity plug-in hybrid electric vehicles (short electric range with gasoline backup for long trips) or gasoline-powered hybrid electric vehicles. If more gasoline savings are needed per vehicle, nondomestic charging infrastructure installation is substantially more expensive than increased battery capacity per gallon saved, and both approaches have higher costs than US oil premium estimates. Cost effectiveness of all subsidies are lower under a binding fuel economy standard. Comparison of results to the structure of current federal subsidies shows that policy is not aligned with fuel savings potential, and we discuss issues and alternatives.

Suggested Citation

  • Peterson, Scott B. & Michalek, Jeremy J., 2013. "Cost-effectiveness of plug-in hybrid electric vehicle battery capacity and charging infrastructure investment for reducing US gasoline consumption," Energy Policy, Elsevier, vol. 52(C), pages 429-438.
  • Handle: RePEc:eee:enepol:v:52:y:2013:i:c:p:429-438
    DOI: 10.1016/j.enpol.2012.09.059

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    References listed on IDEAS

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    Cited by:

    1. Green, Erin H. & Skerlos, Steven J. & Winebrake, James J., 2014. "Increasing electric vehicle policy efficiency and effectiveness by reducing mainstream market bias," Energy Policy, Elsevier, vol. 65(C), pages 562-566.
    2. Arslan, Okan & Yıldız, Barış & Ekin Karaşan, Oya, 2014. "Impacts of battery characteristics, driver preferences and road network features on travel costs of a plug-in hybrid electric vehicle (PHEV) for long-distance trips," Energy Policy, Elsevier, vol. 74(C), pages 168-178.
    3. Manzetti, Sergio & Mariasiu, Florin, 2015. "Electric vehicle battery technologies: From present state to future systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1004-1012.
    4. repec:gam:jsusta:v:9:y:2017:i:11:p:2126-:d:119408 is not listed on IDEAS
    5. Shafiei, Ehsan & Davidsdottir, Brynhildur & Leaver, Jonathan & Stefansson, Hlynur & Asgeirsson, Eyjolfur Ingi, 2015. "Comparative analysis of hydrogen, biofuels and electricity transitional pathways to sustainable transport in a renewable-based energy system," Energy, Elsevier, vol. 83(C), pages 614-627.
    6. repec:wsi:serxxx:v:62:y:2017:i:05:n:s021759081550109x is not listed on IDEAS
    7. Hao, Han & Ou, Xunmin & Du, Jiuyu & Wang, Hewu & Ouyang, Minggao, 2014. "China’s electric vehicle subsidy scheme: Rationale and impacts," Energy Policy, Elsevier, vol. 73(C), pages 722-732.
    8. repec:gam:jsusta:v:9:y:2017:i:10:p:1783-:d:113883 is not listed on IDEAS
    9. Wu, Tian & Shang, Zhe & Tian, Xin & Wang, Shouyang, 2016. "How hyperbolic discounting preference affects Chinese consumers’ consumption choice between conventional and electric vehicles," Energy Policy, Elsevier, vol. 97(C), pages 400-413.
    10. Mallapragada, Dharik S. & Duan, Gang & Agrawal, Rakesh, 2014. "From shale gas to renewable energy based transportation solutions," Energy Policy, Elsevier, vol. 67(C), pages 499-507.
    11. Ivan K. W. Lai & Yide Liu & Xinbo Sun & Hao Zhang & Weiwei Xu, 2015. "Factors Influencing the Behavioural Intention towards Full Electric Vehicles: An Empirical Study in Macau," Sustainability, MDPI, Open Access Journal, vol. 7(9), pages 1-22, September.
    12. Hao, Han & Wang, Sinan & Liu, Zongwei & Zhao, Fuquan, 2016. "The impact of stepped fuel economy targets on automaker's light-weighting strategy: The China case," Energy, Elsevier, vol. 94(C), pages 755-765.
    13. Thomas Covert & Michael Greenstone & Christopher R. Knittel, 2016. "Will We Ever Stop Using Fossil Fuels?," Journal of Economic Perspectives, American Economic Association, vol. 30(1), pages 117-138, Winter.
    14. Wu, Tian & Ma, Lin & Mao, Zhonggen & Ou, Xunmin, 2015. "Setting up charging electric stations within residential communities in current China: Gaming of government agencies and property management companies," Energy Policy, Elsevier, vol. 77(C), pages 216-226.
    15. Redelbach, Martin & Özdemir, Enver Doruk & Friedrich, Horst E., 2014. "Optimizing battery sizes of plug-in hybrid and extended range electric vehicles for different user types," Energy Policy, Elsevier, vol. 73(C), pages 158-168.
    16. Hirte, Georg & Tscharaktschiew, Stefan, 2013. "The optimal subsidy on electric vehicles in German metropolitan areas: A spatial general equilibrium analysis," Energy Economics, Elsevier, vol. 40(C), pages 515-528.
    17. repec:gam:jeners:v:10:y:2017:i:4:p:439-:d:94642 is not listed on IDEAS
    18. repec:eee:appene:v:196:y:2017:i:c:p:238-248 is not listed on IDEAS
    19. Karabasoglu, Orkun & Michalek, Jeremy, 2013. "Influence of driving patterns on life cycle cost and emissions of hybrid and plug-in electric vehicle powertrains," Energy Policy, Elsevier, vol. 60(C), pages 445-461.
    20. Flores, Robert J. & Shaffer, Brendan P. & Brouwer, Jacob, 2016. "Electricity costs for an electric vehicle fueling station with Level 3 charging," Applied Energy, Elsevier, vol. 169(C), pages 813-830.
    21. Saxena, Samveg & MacDonald, Jason & Moura, Scott, 2015. "Charging ahead on the transition to electric vehicles with standard 120V wall outlets," Applied Energy, Elsevier, vol. 157(C), pages 720-728.
    22. Han Hao & Michael Wang & Yan Zhou & Hewu Wang & Minggao Ouyang, 2015. "Levelized costs of conventional and battery electric vehicles in china: Beijing experiences," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1229-1246, October.
    23. repec:eee:rensus:v:78:y:2017:i:c:p:414-430 is not listed on IDEAS


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