IEEE Electrification Magazine - June 2014 - 68

TABLE 2. The Average Gasoline Consumption and Gasoline Displacement
for an Annual Distance of 13,820 mi.

Annual miles in gas mode

PHEV40

PHEV14.3

BEV

2,103

8,700

13,820

Annual miles in electric mode

11,717

5,119

13,820

Annual gasoline consumption

60.1 gal

170.6 gal

0 gal

530.7 gal

Annual gasoline displacement

84.78%

37.05%

100%

TABLE 4. The Average Annual Cost

TABLE 3. The Average Annual Cost
in Gasoline Consumption (US$).
Fuel Price Trend PHEV40
Upward

275.4

PHEV14.3

BEV

781.4

in Electricity Consumption (US$).

CV
2,430.7

Flat

220.0

624.6

1,942.8

Downward

165.0

467.7

1,454.6

cost per mile, while the BeV presents the lowest cost. the
cost of driving a vehicle, in terms of the energy consumed, is
lower for eVs (pheVs and BeVs) in all scenarios, even when
the price of fuel is expected to drop in the future. this supports the statement that the total energy cost of eVs (fuel
and electricity) is much lower than the energy cost of CVs
(fuel only).

Return on Investment for EVs
the significantly higher retail cost and the lower driving
and energy cost of an eV in comparison with a CV motivates the analysis of return on investment for these vehicles. in our study, we focus on the time required by a user
to recover the incremental premium
or the difference in retail cost with a
CV in multiple scenarios of gasoline
and electricity prices. Figure 11 shows
the number of years required to
recover the cost difference for multiple combinations of fuel cost trends
and electricity pricing schemes for
each type of eV. a constant annual
inflation rate of 2.5% has been
assumed, and a vehicle's owner will
not own a vehicle for more than 20
years. thus, if the time required to
recover the incremental premium is
more than 20 years, it is assumed that
it is not recoverable. From Figure 11, it
can be seen that fuel price trend has a
significant impact on the time
required to break even. For all eVs,
when the fuel price shows a downward trend, regardless of the electricity pricing scheme
considered, the incremental premium will never be recovered.

Pricing Scheme

I E E E E l e c t r i f i c ati o n M agaz ine / j un e 2014

PHEV14.3

BEV

Flat rate

848.2

311.3

740.3

0.0

TOU

963.0

384.5

878.9

0.0

RTP

780.5

312.6

704.3

0.0

For a flat trend of fuel cost, tou increases the number of
years to recover the incremental premium (28 years for a
pheV40, 21 years for a pheV14.3, and 23 years for a BeV)
compared with flat rate (23 years for a pheV40, 20 years for
a pheV14.3, and 20 years for a BeV) and rtp (20 years for a
pheV40, 20 years for a pheV14.3, and 19 years for a BeV).
Finally, the upward trend of fuel price reduces the time it
takes to recover the incremental premium for all eVs and
also reduces the impact of different electricity pricing
schemes. on average, in this scenario, it takes between 13
and 14 years to recover the premium for all eVs under any
electricity pricing scheme.
to analyze the return on investment as a function of
gasoline and electricity prices, a study
was conducted assuming a range of
fixed prices for gasoline and electricity
(flat rate) during the years of evaluation. the low gasoline and electricity
prices were assumed to be us$2.0/gal
and us$0.05/kWh, respectively, and
the high gasoline and electricity prices
were us$8.0/gal and $0.25/kWh,
respectively. results are shown in
Figure 12.
the life expectancy of a modern
vehicle in the united states can be
assumed to be around 150,000 mi (10-
12 years), depending on maintenance.
therefore, in those scenarios in which
return of incremental premium surpasses ten years, eVs are unlikely to
represent a real attractive economic
option for a user. assuming the current incremental premium of us$15,000, it is necessary for
the fuel cost to rise to us$5/gal and the electricity to be as

PHEVs and BEVs
offer significant
advantages over CVs
in terms of reducing
gasoline dependency,
tailpipe green house
and smog precursor
gas emissions, and
the energy cost to
drive a vehicle.

PHEV40

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