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A probabilistic total cost of ownership model to evaluate the current and future prospects of electric cars uptake in Italy

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  • Danielis, Romeo
  • Giansoldati, Marco
  • Rotaris, Lucia

Abstract

In order to evaluate the current and future prospects of electric cars’ in Italy, we develop a probabilistic total cost of ownership (TCO) model, which includes stochastic and non-stochastic variables, vehicle usage and contextual assumptions. We find that electric cars are currently not cost-competitive in Italy with the conventional petrol or diesel cars. However, they are cost-competitive with the hybrid electric cars when more than 10,000 km are annually traveled. With incentivizing policies (a €5,000 subsidy and a €400 parking and access fee annual savings), currently in place in a limited number of Italian Regions and cities, electric cars perform in monetary terms better than hybrid electric cars and some diesel cars, especially if they are charged at home. However, electric cars are expected to gain market share in the year 2025 if fuel prices follow past trends, even without subsidies. The driving force could be a drop in their retail price, thanks to declining battery pack costs, and a possible revision of the taxes on diesel.

Suggested Citation

  • Danielis, Romeo & Giansoldati, Marco & Rotaris, Lucia, 2018. "A probabilistic total cost of ownership model to evaluate the current and future prospects of electric cars uptake in Italy," Energy Policy, Elsevier, vol. 119(C), pages 268-281.
    • Handle: RePEc:eee:enepol:v:119:y:2018:i:c:p:268-281
    DOI: 10.1016/j.enpol.2018.04.024
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