Does a lower “total cost of ownership” boost electric car sales?

Enlarge (credit: Toyota)

In 2015, battery-electric vehicles in Japan, the UK, California, and Texas were slightly cheaper than traditional gas or diesel vehicles—as long as you're comparing all these vehicles using their total cost of ownership (TCO).

Although low-emissions vehicles are often more expensive by sticker price than internal combustion engine (ICE) vehicles, low-emission vehicles become more cost-effective over time if you're counting the fuel costs you've avoided along with any tax breaks and incentives. A group of researchers from the University of Leeds tracked the TCO of low-emissions vehicles between 1997 and 2015 in Japan, the UK, California, and Texas. In 2015 in particular, fuel costs and subsidies in all four regions were high enough that battery-electric vehicles (BEVs) were on the whole cheaper than internal combustion vehicles by a small margin.

The TCO for Hybrid Electric Vehicles (HEVs) was still higher than that of traditional vehicles in all regions, because those cars receive fewer subsidies and still require fuel, unlike fully electric vehicles. Plug-in Hybrid Electric Vehicles (PHEVs) were more expensive than any kind of vehicle in all regions except Japan, where generous subsidies bring down the price significantly.