IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v178y2016icp567-578.html
   My bibliography  Save this article

Life-cycle private-cost-based competitiveness analysis of electric vehicles in China considering the intangible cost of traffic policies

Author

Listed:
  • Diao, Qinghua
  • Sun, Wei
  • Yuan, Xinmei
  • Li, Lili
  • Zheng, Zhi

Abstract

Electric vehicles produce zero tailpipe emissions during operation and have thus been considered a most promising method for providing mobility while reducing the greenhouse gas emissions of the transportation sector in the future. The life-cycle cost of electric vehicles has been widely studied to evaluate their competitiveness compared to conventional vehicles. However, the competitiveness of electric vehicles is highly dependent on government promotion policies, and the effects of non-economic incentive policies are currently difficult to include in life-cycle cost analysis. These non-economic effects are usually measured by the intangible cost. Traffic policies represent typical non-economic incentive policies. In China, electric vehicles are exempted from purchase restrictions (license plate control policy) and driving restrictions; thus, the intangible cost of traffic policies has significant effects on the comparison of electric vehicles and conventional vehicles. In this paper, from the consumers’ perspective, the intangible cost of purchase and driving restrictions is modeled and expressed in monetary terms; then, the impact of these non-economic incentive policies are compared with subsidies and other costs of vehicles. Thus, a more comprehensive comparison between electric and conventional vehicles can be provided. Using three selected typical battery electric vehicles and three correspondingly similarly sized conventional vehicles in China, the private life-cycle costs of battery electric vehicles and conventional vehicles are calculated and compared, a parametric variation analysis is performed, and the effects of economic and non-economic incentive policies in different cities are discussed. The comparison shows that, considering the tangible costs of vehicles, battery electric vehicles are not currently economically competitive compared with conventional vehicles, and both national and local subsidies are necessary for battery electric vehicles to compensate the cost gap between battery electric vehicles and conventional vehicles in the short term. However, considering the intangible costs, the advantages of traffic policies are very prominent in mega-cities but are significantly smaller in second-tier cities. With the increasingly worse traffic and environmental problems China facing, it is suggested that the promotion of electric vehicles in mega-cities be prioritized and that electric vehicle promotion policies based on taxes, subsidies and traffic control be balanced.

Suggested Citation

  • Diao, Qinghua & Sun, Wei & Yuan, Xinmei & Li, Lili & Zheng, Zhi, 2016. "Life-cycle private-cost-based competitiveness analysis of electric vehicles in China considering the intangible cost of traffic policies," Applied Energy, Elsevier, vol. 178(C), pages 567-578.
    • Handle: RePEc:eee:appene:v:178:y:2016:i:c:p:567-578
    DOI: 10.1016/j.apenergy.2016.05.116
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261916307206
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2016.05.116?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wang, Lanlan & Xu, Jintao & Qin, Ping, 2014. "Will a driving restriction policy reduce car trips?—The case study of Beijing, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 279-290.
    2. Yannick Perez, 2013. "Public Policy Strategies for Electric Vehicles and for Vehicle to Grid Power," Post-Print hal-01660390, HAL.
    3. Yuan, Xinmei & Li, Lili & Gou, Huadong & Dong, Tingting, 2015. "Energy and environmental impact of battery electric vehicle range in China," Applied Energy, Elsevier, vol. 157(C), pages 75-84.
    4. Hao, Han & Geng, Yong & Li, Weiqi & Guo, Bin, 2015. "Energy consumption and GHG emissions from China's freight transport sector: Scenarios through 2050," Energy Policy, Elsevier, vol. 85(C), pages 94-101.
    5. Wang, Y.F. & Li, K.P. & Xu, X.M. & Zhang, Y.R., 2014. "Transport energy consumption and saving in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 641-655.
    6. Viard, V. Brian & Fu, Shihe, 2015. "The effect of Beijing's driving restrictions on pollution and economic activity," Journal of Public Economics, Elsevier, vol. 125(C), pages 98-115.
    7. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: A bundling model with applications," Energy Economics, Elsevier, vol. 40(S1), pages 85-97.
    8. Wang, Lanlan & Xu, Jintao & Zheng, Xinye & Qin, Ping, "undated". "Will a Driving Restriction Policy Reduce Car Trips? A Case Study of Beijing, China," RFF Working Paper Series dp-13-11-efd, Resources for the Future.
    9. Sun, Cong & Zheng, Siqi & Wang, Rui, 2014. "Restricting driving for better traffic and clearer skies: Did it work in Beijing?," Transport Policy, Elsevier, vol. 32(C), pages 34-41.
    10. Noori, Mehdi & Gardner, Stephanie & Tatari, Omer, 2015. "Electric vehicle cost, emissions, and water footprint in the United States: Development of a regional optimization model," Energy, Elsevier, vol. 89(C), pages 610-625.
    11. Al-Alawi, Baha M. & Bradley, Thomas H., 2013. "Total cost of ownership, payback, and consumer preference modeling of plug-in hybrid electric vehicles," Applied Energy, Elsevier, vol. 103(C), pages 488-506.
    12. Yuan, Xueliang & Liu, Xin & Zuo, Jian, 2015. "The development of new energy vehicles for a sustainable future: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 298-305.
    13. Wang, Hewu & Zhang, Xiaobin & Ouyang, Minggao, 2015. "Energy consumption of electric vehicles based on real-world driving patterns: A case study of Beijing," Applied Energy, Elsevier, vol. 157(C), pages 710-719.
    14. Wu, Tian & Ma, Lin & Mao, Zhonggen & Ou, Xunmin, 2015. "Setting up charging electric stations within residential communities in current China: Gaming of government agencies and property management companies," Energy Policy, Elsevier, vol. 77(C), pages 216-226.
    15. Simmons, Richard A. & Shaver, Gregory M. & Tyner, Wallace E. & Garimella, Suresh V., 2015. "A benefit-cost assessment of new vehicle technologies and fuel economy in the U.S. market," Applied Energy, Elsevier, vol. 157(C), pages 940-952.
    16. Helveston, John Paul & Liu, Yimin & Feit, Elea McDonnell & Fuchs, Erica & Klampfl, Erica & Michalek, Jeremy J., 2015. "Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 96-112.
    17. Zheng, Bo & Zhang, Qiang & Borken-Kleefeld, Jens & Huo, Hong & Guan, Dabo & Klimont, Zbigniew & Peters, Glen P. & He, Kebin, 2015. "How will greenhouse gas emissions from motor vehicles be constrained in China around 2030?," Applied Energy, Elsevier, vol. 156(C), pages 230-240.
    18. Wu, Geng & Inderbitzin, Alessandro & Bening, Catharina, 2015. "Total cost of ownership of electric vehicles compared to conventional vehicles: A probabilistic analysis and projection across market segments," Energy Policy, Elsevier, vol. 80(C), pages 196-214.
    19. Wang, Zhaohua & Liu, Wei, 2015. "Determinants of CO2 emissions from household daily travel in Beijing, China: Individual travel characteristic perspectives," Applied Energy, Elsevier, vol. 158(C), pages 292-299.
    20. Han Hao & Michael Wang & Yan Zhou & Hewu Wang & Minggao Ouyang, 2015. "Levelized costs of conventional and battery electric vehicles in china: Beijing experiences," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1229-1246, October.
    21. Sun, Zuo-Yu & Li, Guo-Xiu, 2015. "On reliability and flexibility of sustainable energy application route for vehicles in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 830-846.
    22. Huo, Hong & Zhang, Qiang & He, Kebin & Yao, Zhiliang & Wang, Michael, 2012. "Vehicle-use intensity in China: Current status and future trend," Energy Policy, Elsevier, vol. 43(C), pages 6-16.
    23. Zhang, Qi & Mclellan, Benjamin C. & Tezuka, Tetsuo & Ishihara, Keiichi N., 2013. "A methodology for economic and environmental analysis of electric vehicles with different operational conditions," Energy, Elsevier, vol. 61(C), pages 118-127.
    24. Seixas, J. & Simões, S. & Dias, L. & Kanudia, A. & Fortes, P. & Gargiulo, M., 2015. "Assessing the cost-effectiveness of electric vehicles in European countries using integrated modeling," Energy Policy, Elsevier, vol. 80(C), pages 165-176.
    25. Hutchinson, Tim & Burgess, Stuart & Herrmann, Guido, 2014. "Current hybrid-electric powertrain architectures: Applying empirical design data to life cycle assessment and whole-life cost analysis," Applied Energy, Elsevier, vol. 119(C), pages 314-329.
    26. Hao, Han & Ou, Xunmin & Du, Jiuyu & Wang, Hewu & Ouyang, Minggao, 2014. "China’s electric vehicle subsidy scheme: Rationale and impacts," Energy Policy, Elsevier, vol. 73(C), pages 722-732.
    27. Gallego, Francisco & Montero, Juan-Pablo & Salas, Christian, 2013. "The effect of transport policies on car use: Evidence from Latin American cities," Journal of Public Economics, Elsevier, vol. 107(C), pages 47-62.
    28. Yang, Jun & Liu, Ying & Qin, Ping & Liu, Antung A., 2014. "A review of Beijing׳s vehicle registration lottery: Short-term effects on vehicle growth and fuel consumption," Energy Policy, Elsevier, vol. 75(C), pages 157-166.
    29. Zhao, Xin & Doering, Otto C. & Tyner, Wallace E., 2015. "The economic competitiveness and emissions of battery electric vehicles in China," Applied Energy, Elsevier, vol. 156(C), pages 666-675.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hofmann, Jana & Guan, Dabo & Chalvatzis, Konstantinos & Huo, Hong, 2016. "Assessment of electrical vehicles as a successful driver for reducing CO2 emissions in China," Applied Energy, Elsevier, vol. 184(C), pages 995-1003.
    2. Liu, Zhiyong & Li, Ruimin & Wang, Xiaokun(Cara) & Shang, Pan, 2018. "Effects of vehicle restriction policies: Analysis using license plate recognition data in Langfang, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 89-103.
    3. Li, Shengxiao (Alex) & Guan, Xiaodong & Wang, Donggen, 2022. "How do constrained car ownership and car use influence travel and life satisfaction?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 155(C), pages 202-218.
    4. Hao, Xu & Lin, Zhenhong & Wang, Hewu & Ou, Shiqi & Ouyang, Minggao, 2020. "Range cost-effectiveness of plug-in electric vehicle for heterogeneous consumers: An expanded total ownership cost approach," Applied Energy, Elsevier, vol. 275(C).
    5. Blackman, Allen & Qin, Ping & Yang, Jun, 2020. "How costly are driving restrictions? Contingent valuation evidence from Beijing," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    6. Zhang, Linling & Long, Ruyin & Chen, Hong, 2019. "Do car restriction policies effectively promote the development of public transport?," World Development, Elsevier, vol. 119(C), pages 100-110.
    7. Sun, Chuanwang & Xu, Shuhua & Yang, Mian & Gong, Xu, 2022. "Urban traffic regulation and air pollution: A case study of urban motor vehicle restriction policy," Energy Policy, Elsevier, vol. 163(C).
    8. Ji, Zhenya & Huang, Xueliang, 2018. "Plug-in electric vehicle charging infrastructure deployment of China towards 2020: Policies, methodologies, and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 90(C), pages 710-727.
    9. Jain, Nikunj Kumar & Kaushik, Kapil & Choudhary, Piyush, 2021. "Sustainable perspectives on transportation: Public perception towards odd-even restrictive driving policy in Delhi, India," Transport Policy, Elsevier, vol. 106(C), pages 99-108.
    10. Sun, Lishan & Huang, Yuchen & Liu, Shuli & Chen, Yanyan & Yao, Liya & Kashyap, Anil, 2017. "A completive survey study on the feasibility and adaptation of EVs in Beijing, China," Applied Energy, Elsevier, vol. 187(C), pages 128-139.
    11. Liu, Zhiyong & Li, Ruimin & Wang, Xiaokun (Cara) & Shang, Pan, 2020. "Noncompliance behavior against vehicle restriction policy: A case study of Langfang, China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 132(C), pages 1020-1033.
    12. Soto, Jose J. & Macea, Luis F. & Cantillo, Victor, 2023. "Analysing a license plate-based vehicle restriction policy with optional exemption charge: The case in Cali, Colombia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 170(C).
    13. Magalhães, David José Ahouagi Vaz de & Rivera-Gonzalez, Carlos, 2021. "Car users’ attitudes towards an enhanced bus system to mitigate urban congestion in a developing country," Transport Policy, Elsevier, vol. 110(C), pages 452-464.
    14. Xianchun Tan & Yuan Zeng & Baihe Gu & Yi Wang & Baoguang Xu, 2018. "Scenario Analysis of Urban Road Transportation Energy Demand and GHG Emissions in China—A Case Study for Chongqing," Sustainability, MDPI, vol. 10(6), pages 1-32, June.
    15. Linn, Joshua & Wang, Zhongmin & Xie, Lunyu, 2016. "Who will be affected by a congestion pricing scheme in Beijing?," Transport Policy, Elsevier, vol. 47(C), pages 34-40.
    16. Gibson, Matthew & Carnovale, Maria, 2015. "The effects of road pricing on driver behavior and air pollution," Journal of Urban Economics, Elsevier, vol. 89(C), pages 62-73.
    17. Nienhueser, Ian Andrew & Qiu, Yueming, 2016. "Economic and environmental impacts of providing renewable energy for electric vehicle charging – A choice experiment study," Applied Energy, Elsevier, vol. 180(C), pages 256-268.
    18. Linn, Joshua & Wang, Zhongmin & Xie, Lunyu, 2018. "The long-run effects of housing location on travel behavior: Evidence from China's housing reform," China Economic Review, Elsevier, vol. 49(C), pages 114-140.
    19. Zeng, Yuan & Tan, Xianchun & Gu, Baihe & Wang, Yi & Xu, Baoguang, 2016. "Greenhouse gas emissions of motor vehicles in Chinese cities and the implication for China’s mitigation targets," Applied Energy, Elsevier, vol. 184(C), pages 1016-1025.
    20. Breetz, Hanna L. & Salon, Deborah, 2018. "Do electric vehicles need subsidies? Ownership costs for conventional, hybrid, and electric vehicles in 14 U.S. cities," Energy Policy, Elsevier, vol. 120(C), pages 238-249.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:178:y:2016:i:c:p:567-578. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.