Plug-in hybrid electric vehicle (PHEV) technology is receiving attention as an approach to reducing US dependency on foreign oil and greenhouse gas (GHG) emissions from the transportation sector. PHEVs require large batteries for energy storage, which affect vehicle cost, weight, and performance. We construct PHEV simulation models to account for the effects of additional batteries on fuel consumption, cost, and GHG emissions over a range of charging frequencies (distance traveled between charges). We find that when charged frequently, every 20 miles or less, using average US electricity, small-capacity PHEVs are less expensive and release fewer GHGs than hybrid electric vehicles (HEVs) or conventional vehicles. For moderate charging intervals of 20–100 miles, PHEVs release fewer GHGs, but HEVs have lower lifetime costs. High fuel prices, low-cost batteries, or high carbon taxes combined with low-carbon electricity generation would make small-capacity PHEVs cost competitive for a wide range of drivers. In contrast, increased battery specific energy or carbon taxes without decarbonization of the electricity grid would have limited impact. Large-capacity PHEVs sized for 40 or more miles of electric-only travel do not offer the lowest lifetime cost in any scenario, although they could minimize GHG emissions for some drivers and provide potential to shift air pollutant emissions away from population centers. The tradeoffs identified in this analysis can provide a space for vehicle manufacturers, policymakers, and the public to identify optimal decisions for PHEV design, policy and use. Given the alignment of economic, environmental, and national security objectives, policies aimed at putting PHEVs on the road will likely be most effective if they focus on adoption of small-capacity PHEVs by urban drivers who can charge frequently.
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