2.13 Conduct and publish total cost of ownership calculations for PEVs
Reason for action
Public and private fleet managers will have to conduct a total cost of ownership (TCO) analysis before electric vehicles can be considered for purchasing. Publicizing the methodology and assumptions behind calculating the TCO of PEVs is useful for anyone interested in purchasing an electric vehicle.
Implementing the action
- Start with national TCO calculators. The U.S. DOE has a TCO calculator that calculates local grid intensity and prices, but does not necessarily include time-variant electricity rates or local driving characteristics. The calculator also describes its methodology for calculating TCO.
- Determine the values of the relevant variables for a TCO calculation. Consider including factors such as the following, many of which are already included in the DOE calculator:
- Vehicle miles traveled, including daily travel patterns
- Electricity prices with respect to time and location
- Gasoline costs
- Cost of installing infrastructure if necessary
- Cost of electric and gasoline vehicles
- Maintenance costs
- Resale value
- Insurance costs
- Assumed discount rate
- Presence of incentives
- Show ways to reduce cost. If expensive but unnecessary charging equipment is included, electric vehicle TCO can run especially high. Spotlight: The initial estimated cost of Arizona’s electric vehicle fleet was especially high because DC fast-chargers and their associated infrastructure (more than $100,000 per fast charger) were included as part of the TCO.
- Find other means for lowering the cost of purchasing PEVs (see Action 3.1 Deploy fleet vehicles).
- Consider including societal benefits in TCO calculation. Total cost of ownership calculations from a public fleet manager could include the societal benefits of switching to PEVs from conventional vehicles, including air quality improvements and GHG emissions reductions. Including the societal benefits of electric vehicles may make them more competitive with conventional and hybrid vehicles.
- Publish calculations on public-facing website and provide documentation and methodology behind the calculator. Explain why results may be different from other calculators. These calculations may help inform other public fleet managers.
- Use online TCO calculations as an opportunity to educate consumers about different electricity rates by linking to electric utility websites. Consumers, even those that have already bought electric vehicles, may not know about special electricity rates or the opportunity to install a separate electricity meter for their electric vehicle.
The DOT can help justify PEV fleet purchases with cost analyses. Calculation methodologies can also be published online so consumers and other public fleet managers can use them (see Action 3.1 Deploy fleet vehicles).