Electric vehicles for greenhouse gas reduction in China: A cost-effectiveness analysis

Abstract There have been ongoing debates over whether battery electric vehicles contribute to reducing greenhouse gas emissions in China’s context, and if yes, whether the greenhouse gas emissions reduction compensates the cost increment. This study informs such debate by examining the life-cycle cost and greenhouse gas emissions of conventional vehicles, hybrid electric vehicles and battery electric vehicles, and comparing their cost-effectiveness for reducing greenhouse gas emissions. The results indicate that under a wide range of vehicle and driving configurations (range capacity, vehicle use intensity, etc.), battery electric vehicles contribute to reducing greenhouse gas emissions compared with conventional vehicles, although their current cost-effectiveness is not comparable with hybrid electric vehicles. Driven by grid mix optimization, power generation efficiency improvement, and battery cost reduction, the cost-effectiveness of battery electric vehicles is expected to improve significantly over the coming decade and surpass hybrid electric vehicles. However, considerable uncertainty exists due to the potential impacts from factors such as gasoline price. Based on the analysis, it is recommended that the deployment of battery electric vehicles should be prioritized in intensively-used fleets such as taxis to realize high cost-effectiveness. Technology improvements both in terms of power generation and vehicle electrification are essential in improving the cost-effectiveness of battery electric vehicles.