Life-cycle private-cost-based competitiveness analysis of electric vehicles in China considering the intangible cost of traffic policies

Abstract

Electric vehicles produce zero tailpipe emissions during operation and have thus been considered a most promising method for providing mobility while reducing the greenhouse gas emissions of the transportation sector in the future. The life-cycle cost of electric vehicles has been widely studied to evaluate their competitiveness compared to conventional vehicles. However, the competitiveness of electric vehicles is highly dependent on government promotion policies, and the effects of non-economic incentive policies are currently difficult to include in life-cycle cost analysis. These non-economic effects are usually measured by the intangible cost. Traffic policies represent typical non-economic incentive policies. In China, electric vehicles are exempted from purchase restrictions (license plate control policy) and driving restrictions; thus, the intangible cost of traffic policies has significant effects on the comparison of electric vehicles and conventional vehicles. In this paper, from the consumers’ perspective, the intangible cost of purchase and driving restrictions is modeled and expressed in monetary terms; then, the impact of these non-economic incentive policies are compared with subsidies and other costs of vehicles. Thus, a more comprehensive comparison between electric and conventional vehicles can be provided. Using three selected typical battery electric vehicles and three correspondingly similarly sized conventional vehicles in China, the private life-cycle costs of battery electric vehicles and conventional vehicles are calculated and compared, a parametric variation analysis is performed, and the effects of economic and non-economic incentive policies in different cities are discussed. The comparison shows that, considering the tangible costs of vehicles, battery electric vehicles are not currently economically competitive compared with conventional vehicles, and both national and local subsidies are necessary for battery electric vehicles to compensate the cost gap between battery electric vehicles and conventional vehicles in the short term. However, considering the intangible costs, the advantages of traffic policies are very prominent in mega-cities but are significantly smaller in second-tier cities. With the increasingly worse traffic and environmental problems China facing, it is suggested that the promotion of electric vehicles in mega-cities be prioritized and that electric vehicle promotion policies based on taxes, subsidies and traffic control be balanced.