Modelling (Dec 2023)
Modeling the Market-Driven Composition of the Passenger Vehicle Market during the Transition to Electric Vehicles
Abstract
The automotive market is currently shifting away from traditional vehicles reliant on internal combustion engines, favoring battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), and plug-in hybrid electric vehicles (PHEVs). The widespread acceptance of these vehicles, especially without government subsidies, hinges on market dynamics, particularly customers opting for vehicles with the lowest overall cost of ownership. This paper aims to model the total cost of ownership for various powertrains, encompassing conventional vehicles, HEVs, PHEVs, and BEVs, focusing on both sedans and sports utility vehicles. The modeling uses vehicle dynamics to approximate the fuel and electricity consumption rates for each powertrain. Following this, the analysis estimates the purchase cost and the lifetime operational cost for each vehicle type, factoring in average daily mileage. As drivers consider vehicle replacements, their choice tends to lean towards the most economical option, especially when performance metrics (e.g., range, acceleration, and payload) are comparable across the choices. The analysis seeks to determine the percentage of drivers likely to choose each vehicle type based on their specific driving habits. Advances in battery technology will reduce the battery weight and cost; further, the cost of electricity will decrease as more renewable energy sources will be integrated into the grid. In turn, the total cost of ownership will decrease for the electrified vehicles. By following battery trends, this study is able to model the makeup of the automotive market over time as it transitions from fossil-fuel based vehicles to fully electric vehicles. The model finds until the cost of batteries and electricity is significantly reduced, the composition of the vehicle market is a mixture of all vehicle types.
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