Publication Detail

Hybrid Electric Vehicle Design: Retail and Lifecycle Cost Analysis


Research Report

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Suggested Citation:
Lipman, Timothy E. and Mark A. Delucchi (2003) Hybrid Electric Vehicle Design: Retail and Lifecycle Cost Analysis. Institute of Transportation Studies, University of California, Davis, Research Report UCD-ITS-RR-03-01

Various types of electric-drive and other clean-fuel vehicles continue to be of interest as a means to control motor vehicle pollution and to curb petroleum use both in the U.S. and in many other countries. Since travel behavior is difficult to change, many analysts believe that modifying vehicle technology is the best means to offset the environmental impacts of continued increases in vehicle miles traveled (VMT) in areas where automobile use is dominant. Hybrid-electric vehicles (HEVs) are one vehicle type that can reduce petroleum use and greenhouse gas emissions, and also help enable low emissions of other pollutants. Toyota and Honda are currently commercializing HEV models, with other automakers bringing HEVs to market over the next few years.

Presented here is one analysis of the manufacturing costs, retail prices, and lifecycle costs of five different HEV types in high-volume production in the year 2010 timeframe. There vehicles types include compact, mid-sized passenger car, large pickup truck, minivan, and sport-utility vehicle. For purposes of this analysis, we have updated and made major modifications to a detailed motor vehicle retail and lifecycle cost spreadsheet model that we have previously used to analyze the costs of various types of conventional vehicles, electric-drive vehicles, and other alternative-fuel vehicles. We have then combined the use of this cost model with a HEV design and performance analysis performed by our colleagues using the Advisor vehicle simulation model. This analysis has produced five different HEV designs for each vehicle type (for a total of 25 primary HEV cases and a set of five baseline gasoline vehicles for comparison).

This integration of an HEV design and performance analysis with our HEV retail price and lifecycle cost modeling framework and analysis has resulted in the following primary results and key insights:
  • the "HEV Price Effects" of the various options range from $2,543 (Cavalier AM case) to $6,694 (Silverado MF case) and are as follows, based on the estimated full retail price of the vehicles to consumers:
    HEV Price Effect (Year 2000 $s)
    MM CaseMF CaseAM CaseAF1 CaseAF2 Case
    MM = moderate package of improvements, mild hybridization; MF = moderate package of improvements, full hybridization; AM = advanced package of improvements, mild hybridization; AF1 = advanced package of improvements, full hybridization case 1; AF2 = advanced package of improvements, full hybridization case 2;
  • the vehicle lifecycle cost disparities between the HEVs and baseline vehicles are somewhat lower in relative terms than the retail price differences, with lifecycle costs of some HEVs (and particularly the AM designs) in some cases being very similar to those of the baseline vehicles even though their retail prices are a few thousand dollars higher;
  • the gasoline breakeven prices that we calculate for the various HEVs in comparison with the baseline ICEVs range from $1.49 per gallon to $2.65 per gallon, and the low end of this range is very close to the $1.46 per gallon assumed U.S. national average price in the study, again suggesting that at least a few of the HEV designs are very close to being economically competitive on a lifecycle cost basis;
  • given the various assumptions and estimates used in this analysis, it appears that combining the "advanced package of vehicle improvements" with "mild vehicle hybridization" (AM case) provides what generally is the least-cost solution of the HEV options and that has lifecycle costs very close to those of the baseline vehicles; and
  • these AM cases may be close to a set of "optimized" cases in terms of both cost and performance, for the various vehicle types but if fuel economy gains are valued more highly (such as through carbon taxes or oil import externality taxes, or through a "social cost analysis") then the more fuel efficient options, and in particular the AF2 cases, might look attractive as well.