Lifetime Cost of a Vehicle
Total Cost of Automobile Ownership described by Argonne National Laboratory.
In April, Argonne National Laboratory released a thorough analysis on the total cost of ownership for a variety of vehicles and powertrains. Â
A vehicle is one of the most expensive purchases the average person will make in his/her lifetime. As alternative fuel vehicles (AFVs) such as battery and hybrid vehicles gain market share, the average middle class consumer will debate on making the best decision. By now, most understand that the sustainable decision is contributing toward the mission of electrifying the world. Unfortunately humans are opposed to taking risk if that option is more expensive than what he/she is already accustomed.Â
The Price of Mobility
Purchasing a vehicle is step one. The MSRP (manufacturer's suggested retail price) is only a small portion of the total cost of ownership. Argonne consolidated all of the below factors into their report.Â
Depreciation
Insurance
Maintenance and Repair
Taxes, fees, parking, tolls, etc
Charging costs
Inflation rates
Before we get into the data, think about a traditional $20,000 vehicle. With insurance, maintenance, gasoline, registration fees, etc an internal combustion vehicle could wind up costing nearly $100,000 over a 10 year lifespan. Don’t believe it? Let’s dive in.
Most people are accustomed to the notion that as soon as you drive a new vehicle off the lot the value drops substantially. This drop in value is called depreciation and varies depending on the vehicle type and model. The results show that a hybrid (HEV) actually holds its value the best after 15 years.
Maintenance
Keeping your vehicle well tuned up and healthy is the best way to maximize the lifetime of your vehicle. Simply speaking, a battery powered vehicle has fewer moving parts than an internal combustion engine (ICE). ICE’s need oil changes, more frequent brake repairs, belt replacements, fluid changes, and other repairs. This correlates to a BEV’s maintenance cost to be ~40% less than an ICE.
Extra Miscellaneous Costs
The remaining costs can be summed up into one. The average 15 year per mile cost of driving a small SUV is shown below. The BEV300 on the far right is a 300 mile range battery electric vehicle. Reference page 147, Table B for the absolute numbers.
And the WINNER is!
Interestingly enough despite all of the positive press around BEVs, the HEV is the lowest cost over time. The market will inevitably shift to pure battery powered vehicles as the infrastructure and supply chains get built out. This most recent report suggests that we should expect at least another few years before the total cost of ownership becomes more economical for pure battery powered vehicles.Â
Further Thoughts
I found it particularly interesting that they did not provide the full analysis for a BEV with 200 mile range. Whether it be the Kia Nero or Nissan Leaf there are options that are more reasonably priced that may be more economical than a hybrid.
It seems like we can expect a squeeze on raw materials which could cause battery prices to increase over the next couple years. The government may need to subsidize the battery industry more if the world wants to push harder toward an electrified future. Â
References: