Vehicle Choice Overload

If you’re like me—and many of us here at RMI—you want an economical vehicle that also reduces carbon emissions and helps rid us of oil dependence. But which kind of car is your best choice? Between traditional gas-powered autos, hybrids, and several kinds of electric cars, it’s enough to give a consumer powertrain paralysis.

Within the next three to five years, those choices are going to get even more interesting as gas vehicles achieve better fuel economy and the cost of alternative powertrains continues to drop. New entry-level small sedan efficiency can exceed 30 mpg, and rapidly dropping electric vehicle cost is evidenced by announcements of Tesla’s $35,000 Model III and a second-generation Nissan LEAF with more than double the range and a significant price drop, both for model year 2017.

Can car consumers have their cake and eat it, too? Will a powertrain rise to the top as both the cheapest to own and operate and the one with the lightest CO2 emission profile and little (or no) oil dependence? We’ve done the analysis to figure out which vehicles win, and surprisingly, which won’t be worth the investment.

The Contenders

In the next three to five years, car buyers will have many options in these designs:
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Running the Numbers

We used industry cost projections on batteries, power electronics, and powertrains, as well as projected improvements in ICE efficiency, to create simulations of model year 2020 sedans. We judged the vehicles on two major parameters, assuming the driving habits of the average American:

  • Cost to own and operate based on upfront capital and fuel cost
  • Lifetime carbon dioxide emissions relative to an ICE (including manufacture)

All vehicles modeled in our study have the same theoretical trim, rolling resistance, aerodynamics, and 0–60 mph acceleration. The long-range BEV was aggressively lightweighted with aluminum at net cost savings due to battery/powertrain downsizing (aggressive aluminum lightweighting did not make economic sense for the other vehicles and adds CO2 emissions in manufacturing). Certain costs were omitted for simplicity of analysis, including maintenance, potential vehicle-to-grid value, insurance, and other variables (including tax incentives, many of which will expire in the next few years).

Basic Assumptions:

Model Year:     2020
Annual Mileage:    12,000
Length of Ownership: 8 years (battery life guarantee for electric vehicles)
Gasoline Cost:    $3.50/gal
Electricity Cost:    $0.10/kWh (assuming off-peak charging under time-of-use rates)
Battery Cost:    $200/kWh
PHEV EV Range:    15 mi (33% EV miles, 67% gas miles)
EREV EV Range:    45 mi (75% EV miles, 25% gas miles)
BEVx EV Range:    45 mi (75% EV miles, 25% gas miles)


HEV and BEVx save a cool $1,000 and 100-mile BEV Saves Thousands More:
Although the HEV, BEVx, and 100-mile BEV will have an upfront cost $2,000–$6,000 higher than the baseline ICE, they will be thousands of dollars less expensive over eight years than a typical ICE. These electric powertrains are so much more cost-effective to operate that their fuel savings completely offset their extra initial cost. In other words, they will be cheaper to own and operate than an ICE auto, even with no tax incentives of any kind.

EREV Breaks Even, but PHEV Doesn’t:
For the typical American driver, the PHEV won’t save money but the EREV will break even compared to an ICE. But why does the BEVx save money and the EREV just break even? The EREV has superior fuel efficiency vs. a BEVx in gas mode because the EREV engine assists the powertrain. Also, the EREV requires fewer batteries than a BEVx because the BEVx must reserve a few kWh of battery power to ensure that the onboard generator can keep up, even in arduous driving conditions (e.g., driving 65 mph on Interstate 70 across Colorado’s Rockies).  However, the PHEV/EREV powertrain is more complex than a BEVx, and the gas engine on a PHEV/EREV must be large enough to deliver driving power in arduous driving conditions if the battery is fully exhausted. The larger, more complex powertrain on a PHEV adds thousands of dollars in upfront cost vs. a BEVx, even though the BEVx has a larger battery pack. It is interesting to note that a PHEV/EREV is less expensive than a BEVx at higher battery costs. But as battery prices are projected to fall to ~$200/kWh by 2020, the extra batteries in a BEVx will be less expensive than the more complex PHEV/EREV powertrain. The EREV does use less gasoline and emit less CO2 than a BEVx, so if the cost differential is closer than we project (e.g., battery prices stay higher than projected), an EREV could be a better choice.

200-mile BEV Does Not Pay Back:
The 200-mile range BEV does not pay back, even with $200/kWh batteries, at least for these fuel costs and average annual mileage assumptions. In fact, the 200-mile BEV does not pay back unless batteries drop well below $200/kWh or tax incentives are continued beyond 2020. Interestingly, the long-range BEV does payback if annual mileage is much greater than 12,000, indicating that long-range BEVs could still be a great economic choice for high-mileage consumers or fleets.

Carbon Dioxide Emissions

Comparing relative lifetime carbon dioxide emissions of the six vehicles on the existing U.S. electrical grid, the low-range BEV came out as the best option, emitting 13 fewer tonnes of CO2 in its life versus the baseline ICE. The EREV, BEVx, HEV, and PHEV also beat the ICE, with 11, 10, 8, and 7 tonnes less than the ICE, respectively. The 200-mile BEV is only five tonnes better than baseline due primarily to the high energy/carbon intensity of aluminum and lithium-ion battery manufacturing (hence Tesla Motors’ excellent plan to power its “Gigafactory” with renewables).

As the U.S. grid moves toward renewable energy as envisioned in RMI’s Reinventing Fire (or if you charge from local renewables like rooftop solar), plug-in vehicles begin to greatly reduce lifetime carbon dioxide emissions. The 100-mile BEV is still the best at 24 tonnes better than the ICE, with the EREV and BEVx close behind at 23 tonnes better. Surprisingly, the BEVx and EREV still edge out the 200-mile BEV, even with an electrical grid comprised of 80 percent renewable energy. The result is surprising in that BEVx is more economical and emits less lifetime CO2 than long-range BEVs. This is due to the fact that for the average American’s driving habits, a long-range BEV serves as a “battery taxi” most of the time, wasting 100 miles worth of range on 95 percent of days. In a long-range BEV you’re paying—in upfront cost, added weight, decreased MPGe, and increased carbon emissions—for extra batteries that sit idle most of the time for the average driver. Though in the special case of drivers who travel more than 100 miles per day, the long-range BEV is the best choice. This is an interesting result for “hyper commuters” and fleet operators.

Gasoline [In]dependence

When we compare gasoline dependence of the five non-ICE vehicles, pure battery vehicles obviously come out ahead. However, some consumers probably won’t consider 100-mile BEVs because of range anxiety, and long-range BEVs fail to payback economically. So how do we get off of oil? A fleet of 100-percent HEVs is a marked improvement over today, but even if everyone switched to driving a Prius overnight, it’d still require about 60 percent of our current gasoline supply. This is exacerbated by the fact that the global auto fleet is projected to double in the next 20 years, leaving a pure HEV world with more total demand for gasoline than today.

A U.S. fleet of 100 percent BEVx, on the other hand, would require only about 1.6 million barrels of gasoline per day (Mbbl/d). This is quite a bit, but consider that today autos in the U.S. use about 8 Mbbl/d, 50 percent of total U.S. oil consumption. With a 100 percent BEVx fleet and reduced freight, aero, and industry oil demand (which makes up the balance), the U.S. would need about 4.1 Mbbl/day, which is well within our biofuel production potential. Even if biofuels do not reach this potential, meeting a demand of 4 Mbbl/day instead of today’s 17 Mbbl/d would alleviate the need to import OPEC oil and would remove the incentive for risky domestic oil extraction (e.g., deep sea drilling). In addition, the range extender on the BEVx need not be a typical gas engine. Since it no longer needs to deliver propulsion power, just charge a battery, it could be a linear generator like Toyota’s with 40–50 percent efficiency (typical gas engines struggle to reach 30 percent). The range extender could also be a fuel cell, extra short-term rental battery pack, or other advanced electricity generator. Using an advanced range extender could further obviate the need for oil.

And the Winner is . . .

For consumers who can allay their range anxiety—including urban drivers, lower-mileage commuters, and families that have a second gas-powered car for longer trips—the low-range BEV is a winner. It will save $3,800 over its guaranteed battery life, eliminate oil use, and reduce CO2 emissions, even on a coal-rich grid. The low-range BEV also has a perfect synergy with the BEVx, which can expand the powertrain’s appeal. The low-range BEV and BEVx can share the same electric powertrain and platform. Carmakers could offer consumers the choice of low-range BEV or BEVx on the same vehicle (like BMW is already doing on its increasingly popular i3). The BEVx could have a range extender in lieu of half the BEV battery pack. Consumers can then make the choice of which fits their lifestyle best.

And for those of us who insist on range parity with traditional vehicles, opting for the BEVx option is still a very smart choice. By 2020, the BEVx offers $1,000 of cost savings versus gas ICEs at conservative cost projections on commercial technology. If gasoline prices increase, the ROI gets even sweeter. The BEVx reduces vehicle CO2 emissions, even on today’s coal-rich grid, and gets markedly better when charged by renewable energy. And despite it employing a range extender 25 percent of the time, the BEVx has the potential to completely eliminate the need for fossil-based liquid fuel.

When it comes to vehicle choice, there’s no need for powertrain paralysis. At the end of the day (or the commute), a BEV/BEVx world offers a win-win, with clear cost savings, lower CO2 emissions, and eliminated dependence on foreign and risky oil.

Disclosure: The author is the proud and very satisfied driver of a leased Chevy Volt.

Image courtesy of Shutterstock.