Are battery electric vehicles cost competitive? An income-based analysis of the costs of new vehicle purchase and leasing for the German market – International Council on Clean Transportation

New Battery Electric Vehicles (BEVs) in the German Market

In the first quarter of 2023, new battery electric vehicles (BEVs) accounted for 14% of total new vehicle registrations in Germany. While the adoption of BEVs has increased in recent years, concerns about their cost-competitiveness compared to gasoline models persist. Research indicates that the total cost of ownership is a significant barrier to the adoption of BEVs, and these vehicles are more likely to be owned by individuals with higher incomes.

Implications of Cost Barriers for Decarbonizing the Private Passenger Car Fleet in Germany

This study aims to examine the implications of cost barriers for decarbonizing the private passenger car fleet in Germany. We analyze the total cost of ownership for selected vehicle models in the compact and mini segments over a four-year holding period. In the compact segment, we compare the battery electric Volkswagen (VW) ID.3 Pro with the gasoline VW Golf VIII Style 2. In the mini segment, we compare the battery electric Dacia Spring Extreme Electric 65 with the gasoline Toyota Aygo X 1.0. The report also explores the share of these costs in relation to net household income for different income groups in Germany. Additionally, it discusses strategies to improve access to BEVs in Germany.

Key Findings

• Battery electric cars in the compact segment are already more cost-effective than comparable gasoline models, with a cost advantage of €12,300 with purchase incentives and €5,100 without.
• In the mini-car segment, purchase incentives are crucial in making battery electric cars a more economical choice compared to gasoline cars.
• Leasing costs over a four-year period for the selected BEV models are cheaper in the compact segment but not in the mini car segment without incentives.
• Regardless of charging scenarios, all BEV models are cheaper to charge than fueling comparable gasoline models.
• The vehicle ownership tax and the greenhouse gas (GHG) quota have a minimal impact on total vehicle costs.
• Income-based incentives can help lower-income households participate in the transition to electric vehicles and accelerate the adoption of BEVs in the market.

Four-year total cost of ownership for selected vehicle models in the compact (C) and mini car (A) segments in Germany from 2023 to 2026, assuming 100% alternating current home charging. Costs are shown with and without the 2023 one-time purchase incentive and four-year application of the GHG quota.

These findings highlight that costs remain a significant barrier to the adoption of BEVs, and for many individuals in Germany, they represent a higher proportion of their net income compared to average transportation expenses. Understanding the costs of owning new BEVs in comparison to gasoline models can assist the German government in making informed decisions regarding transportation policies in the future.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 7: Affordable and Clean Energy
• SDG 9: Industry, Innovation, and Infrastructure
• SDG 11: Sustainable Cities and Communities
• SDG 13: Climate Action

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 7.2: Increase substantially the share of renewable energy in the global energy mix.
• SDG 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
• SDG 11.6: Reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.
• SDG 13.2: Integrate climate change measures into national policies, strategies, and planning.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Percentage of new vehicle registrations that are battery electric vehicles (indicator for SDG 7.2)
• Comparison of total cost of ownership for battery electric vehicles and gasoline models (indicator for SDG 9.4)
• Comparison of costs as a share of net household income for different income groups (indicator for SDG 11.6)
• Identification of ways to enhance access to battery electric vehicles (indicator for SDG 11.6)
• Discussion of income-based incentives to accelerate the adoption of battery electric vehicles (indicator for SDG 13.2)

Table: SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: theicct.org

Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.