Suggested Citation:
Sun, Yongling (2010) Societal Lifetime Cost Comparison of Hydrogen Fuel Cell Vehicles and Gasoline Vehicles. Institute of Transportation Studies, University of California, Davis, Research Report UCD-ITS-RR-10-19

Various alternative fuels and vehicles have been proposed to address transportation related environmental and energy issues such as air pollution, climate change and energy security. Hydrogen fuel cell vehicles (FCVs) are widely seen as an attractive long term option, having zero tailpipe emissions and much lower well to wheels emissions of air pollutants and greenhouse gases than gasoline vehicles. Hydrogen can be made from diverse primary resources such natural gas, coal, biomass, wind and solar energy, reducing petroleum dependence. Although these potential societal benefits are often cited as a rationale for hydrogen, few studies have attempted to quantify them.  

This research attempts to quantify the societal benefits of hydrogen and FCVs, as compared with gasoline vehicles and examines how this affects transition timing and costs for hydrogen FCVs. We employ societal lifetime cost as an important measure for evaluating hydrogen fuel cell vehicles (FCVs) from a societal welfare perspective as compared to conventional gasoline vehicles. This index includes consumer direct economic costs (initial vehicle cost, fuel cost, and operating and maintenance cost) over the entire vehicle lifetime, and considers external costs resulting from air pollution, noise, oil use and greenhouse gas emissions over the full fuel cycle and vehicle lifetime. Adjustments for non-cost social transfers such as taxes and fees, and producer surplus associated with fuel and vehicle are taken into account as well.

We employ a learning curve model for fuel cell system cost estimates. The delivered hydrogen fuel cost is estimated using the UC Davis SSCHISM hydrogen supply pathway model, and most vehicle costs are estimated using the Advanced Vehicle Cost and Energy Use Model (AVCEM). To estimate external costs, we use AVCEM and the Lifecycle Emissions Model (LEM). We estimate upstream air pollution damage costs with estimates of emissions factors from the LEM and damage factors with a simple normalized dispersion term from a previous analysis of air pollution external costs. To account for uncertainties, we examine hydrogen transition costs for a range of market penetration rates, externality evaluations, technology assumptions, and oil prices. Our results show that although the cost difference between FCVs and gasoline vehicles is initially very large, FCVs eventually become lifetime cost competitive with gasoline vehicles as their production volume increases, even without accounting for externalities. High valuation of externalities and high oil prices could reduce hydrogen transition costs by more than $10 billion and make hydrogen FCVs achieve cost competitiveness sooner relative to our reference case.

The research was supported by a grant from the Sustainable Transportation Center at the University of California Davis, which receives funding from the U.S. Department of Transportation and Caltrans, the California Department of Transportation, through the University Transportation Centers program.

The contents of this report reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein.  This document is disseminated under the sponsorship of the Department of Transportation University Transportation Centers Program, in the interest of information exchange.  The U.S. Government assumes no liability for the contents of use thereof.