Forecasting the value of battery electric vehicles compared to internal combustion engine vehicles: the influence of driving range and battery technology

TL;DR

This study forecasts when technological improvements in batteries and design will make battery electric vehicles more valuable to users than internal combustion engine vehicles, considering driving range and cost trade-offs.

Contribution

It provides a detailed simulation-based analysis of how technological progress will influence the relative user value of BEVs versus ICEVs over time.

Findings

BEVs currently have lower user value due to high battery and recharging costs.

High performance large BEVs may surpass ICEVs in user value around 2050.

Low performance compact BEVs are unlikely to surpass ICEVs in user value before 2050.

Abstract

Battery electric vehicles (BEVs) are now clearly a promising candidate in addressing the environmental problems associated with conventional internal combustion engine vehicles (ICEVs). However, BEVs, unlike ICEVs, are still not widely accepted in the automobile market but continuing technological change could overcome this barrier. The aim of this study is to assess and forecast whether and when design changes and technological improvements related to major challenges in driving range and battery cost will make the user value of BEVs greater than the user value of ICEVs. Specifically, we estimate the relative user value of BEVs and ICEVs resulting after design modifications to achieve different driving ranges by considering the engineering trade-offs based on a vehicle simulation. Then, we analyze when the relative user value of BEVs is expected to exceed ICEVs as the energy density and cost of batteries improve because of ongoing technological change. Our analysis demonstrates that the relative value of BEVs is lower than that of ICEVs because BEVs have high battery cost and high cost of time spent recharging despite high torque, high fuel efficiency, and low fuel cost. Moreover, we found the relative value differences between BEVs and ICEVs are found to be less in high performance large cars than in low performance compact cars because BEVs can achieve high acceleration performance more easily than ICEVs. In addition, this study predicts that in approximately 2050, high performance large BEVs could have higher relative value than high performance large ICEVs because of technological improvements in batteries; however low performance compact BEVs are still very likely to have significantly lower user value than comparable ICEVs until well beyond 2050.