Battery electric vehicles (BEVs) are now clearly a promising candidate in addressing the environmental problems associated with conventional internal combustion engine vehicles (ICEVs). However, BEVs, unlike ICEVs, are still not widely accepted in the automobile market but continuing technological change could overcome this barrier. The aim of this study is to assess and forecast whether and when design changes and technological improvements related to major challenges in driving range and battery cost will make the user value of BEVs greater than the user value of ICEVs. Specifically, we estimate the relative user value of BEVs and ICEVs resulting after design modifications to achieve different driving ranges by considering the engineering trade-offs based on a vehicle simulation. Then, we analyze when the relative user value of BEVs is expected to exceed ICEVs as the energy density and cost of batteries improve because of ongoing technological change. Our analysis demonstrates that the relative value of BEVs is lower than that of ICEVs because BEVs have high battery cost and high cost of time spent recharging despite high torque, high fuel efficiency, and low fuel cost. Moreover, we found the relative value differences between BEVs and ICEVs are found to be less in high performance large cars than in low performance compact cars because BEVs can achieve high acceleration performance more easily than ICEVs. In addition, this study predicts that in approximately 2050, high performance large BEVs could have higher relative value than high performance large ICEVs because of technological improvements in batteries; however low performance compact BEVs are still very likely to have significantly lower user value than comparable ICEVs until well beyond 2050.
Battery electric vehicles (BEVs) are energy efficient and produce zero tail pipe emissions as they use electric motors and motor controllers instead of internal combustion engines for propulsion and battery packs instead of fuel tanks to store energy. Because of these technical characteristics, BEVs have received considerable attention as the solution to address the environmental problems such as climate change and air pollution associated with conventional internal combustion engine vehicles (ICEVs). Accordingly, governments in many countries have promoted the consumer adoption of BEVs by providing both financial and non-financial incentives such as tax exemptions, expansion of related infrastructure, free parking, discounted/free toll, and use of high-occupancy-vehicle lanes [1][2][3][4][5]. Moreover, automobile manufacturers are speeding up their efforts to develop BEVs [6]. However, BEVs, unlike ICEVs, are not yet widely accepted in the automobile market. Moreover, the acceptance appears more advanced in higher performance high priced vehicles than it is in the mass market. Specifically, in 2017, 1.2% of new cars sold in the U.S. were electric vehicles but 24.1% of the electric vehicles sold in U.S. were Tesla Model S and X which start at $74,500 (only about 1.5% of ICEVs sold in U.S. were priced at more than $74,500) [7]. Many researchers have noted that key barriers to BEV market penetration are high battery costs and limited driving ranges [8][9][10][11][12][13][14]. However, recent technological developments in BEVs provide an encouraging signal for both areas [15,16].
A working assumption in this paper is that BEVs will be widely accepted in the automobile market only when the value or utility which BEVs can give to consumers is as high or higher than ICEVs 1 . Thus, in order to assess the future of BEVs in the market, it is important to investigate how design changes and technological improvements related to driving range and batteries in BEVs affect the user value of BEVs and whether these effects are likely to make the user value of BEVs greater than that of ICEVs.
ICEVs and BEVs are essentially mobile machines that transport people or cargo. However, the user value of ICEVs and BEVs are difficult to evaluate comprehensively because consumers generally value an extensive set of both objective and subjective attributes. In this study, we develop an index to evaluate the relative value of ICEVs and BEVs based on the vehicle attributes which are distinguishable because of the fundamental technological differences in ICEVs and BEVs.
Previous studies have analyzed the marginal effects of vehicle attributes such as price and driving 1 Carbon pricing or other incentives to deal with climate change will change the user value of BEVs if they are enacted and if electricity production systems become more carbon-free than at present. range on the user value of ICEVs and BEVs by modeling consumer choice behavior and demand for the automobile market among existing products [17][18][19][20][21][22][23][24]. However, it is problematic to assess how design changes and technological improvements in the mid-and long-term affect the user value of ICEVs and BEVs if one only considers demand side empirical models. Thus, we go beyond demand considerations and treat engineering trade-offs in ICEVs and BEVs using a relatively simple user value index.
The technical differences between ICEVs and BEVs affect consumer attributes, trade-offs among these attributes, and the relative user value of ICEVs and BEVs. Therefore, this study estimates changes in the vehicle attributes and relative user value of BEVs and ICEVs resulting from design changes to achieve driving ranges not currently available. This is done while considering the engineering trade-offs based on a vehicle simulation. Then, we analyze when the relative user value of BEVs is expected to exceed ICEVs as the energy density and cost of batteries improve because of ongoing technological change. We ignore much other technological change which more or less equally affects ICEVs and BEVs.
The remainder of this paper is organized as follows. Section 2 describes our relative user value index for ICEVs and BEVs and the simulation methods we use in this study. Section 3 presents the simulation and sensitivity test results. Section 4 interprets the results and discusses their implications.
Section 5 provides conclusions.
In this study, we develop an index to evaluate the relative user value of ICEVs and BEVs. There are numerous vehicle attributes that provide utility to the user of the vehicle. However, this study develops the relative user value index based on vehicle attributes that characterize differences between ICEVs and BEVs in user value according to the key technical differences. The fundamental technical difference between ICEVs and BEVs is that the core technological domains are different in the energy storage and energy conversion of the vehicle. ICEVs
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