Life cycle cost of conventional, battery electric, and fuel cell electric vehicles considering traffic and environmental policies in China

Abstract Electric vehicles (EVs) are considered a promising alternative to conventional vehicles (CVs) to alleviate the oil crisis and reduce urban air pollution and carbon emissions. Consumers usually focus on the tangible cost when choosing an EV or CV but overlook the time cost for restricting purchase or driving and the environmental cost from gas emissions, falling to have a comprehensive understanding of the economic competitiveness of CVs and EVs. In this study, a life cycle cost model for vehicles is conducted to express traffic and environmental policies in monetary terms, which are called intangible cost and external cost, respectively. Battery electric vehicles (BEVs), fuel cell electric vehicles (FCEVs), and CVs are compared in four first-tier, four new first-tier, and 4 s-tier and below cities in China. The comparison shows that BEVs and FCEVs in most cities are incomparable with CVs in terms of tangible cost. However, the prominent traffic and environmental policies in first-tier cities, especially in Beijing and Shanghai, greatly increase the intangible and external costs of CVs, making consumers more inclined to purchase BEVs and FCEVs. The main policy benefits of BEVs and FCEVs come from three aspects: government subsidies, purchase and driving restrictions, and environmental taxes. With the predictable reduction in government subsidies, traffic and environmental policies present important factors influencing the competitiveness of BEVs and FCEVs. In first-tier cities, BEVs and FCEVs already have a competitive foundation for large-scale promotion. In new first-tier and second-tier and below cities, stricter traffic and environmental policies need to be formulated to offset the negative impact of the reduction in government subsidies on the competitiveness of BEVs and FCEVs. Additionally, a sensitivity analysis reveals that increasing the mileage and reducing fuel prices can significantly improve the competitiveness of BEVs and FCEVs, respectively.