The economic and environmental case for electric vehicles

Electricity generation comes from many energy sources, including fossil fuels such as natural gas and coal, nuclear energy, and a variety of renewable sources such as wind, solar, hydroelectric, and biomass. For the transportation sector, however, energy comes primarily from crude oil. In 2019, 91% of energy for the transportation sector came from crude oil with the bulk of the remainder coming from compressed natural gas (CNG) and ethanol. Of the two emerging transportation technologies, the electric vehicle (EV) made up less than 1% and the hydrogen-powered fuel cell vehicle (FCV) was two orders of magnitude below this.

Technically, EVs and FCVs are both electric vehicles. The EV is powered by electricity stored in a battery while an FCV is powered by a fuel cell, such that the electricity is generated from hydrogen. FCVs have the advantage of refueling times equivalent to an internal combustion engine (ICE) powered by gasoline, but suffer from lack of infrastructure, high fuel prices, and technical difficulties storing hydrogen onboard in a form other than high pressure hydrogen. As well, hydrogen has to be made by either reforming, gasification, or electrolysis. There are currently only 46 hydrogen fuel stations in the US, most of them in California versus more than 150,000 gasoline and diesel stations. And, while the Department of Energy models project around $4-6 per gallon of gasoline equivalent (gge, where 1 kg of hydrogen is equivalent in energy to 1 gallon of gasoline), real world numbers have been $15/gge.

Compared to an FCV, EVs provide a bridge between transportation and electricity, and there is already substantial infrastructure in the form of the electric grid to move electricity around the country. There are also advantages for the EV relative to an ICE in terms of fuel price and CO₂emissions. For an ICE, the current CAFE (corporate average fuel economy) is about 25 mpg. This means that for a given automotive manufacturer, the vehicles in their fleet need to have an average fuel economy of 25 mpg. Using a typical pre-pandemic price for gasoline of $3/gallon, the cost per mile driven is $0.12. To calculate this for EVs, we first need the cost of a gge. Using an US average cost of about $0.11/kWh (kilowatt-hour) for electricity and recognizing that there are 33.4 kWh/gge, the price of electricity as a fuel is $3.67/gge. A typical fuel economy for EVs is 120 mpgge, or 3.6 miles/kWh, so the cost per mile driven for an EV is $0.03, ¼ of an ICE.

The EV also has an advantage in CO₂ emissions, an important factor since around 50% of all CO₂ emissions in the US come from transportation. Although refineries do not currently capture and sequester CO₂, only about 10% could be captured as the other 90% are emitted by the vehicle. Some methods have been examined to capture emissions from the vehicle tailpipe, but this is difficult, far from 100% effective, and would require transferring the CO₂ from the vehicle to some processing facility. For an ICE, the total life cycle CO₂ emissions are about 1 lb per mile driven, decreasing to about 0.6 lb per mile driven for a hybrid. A life cycle analysis considers CO₂ made for all stages of the process including raw material processing, manufacturing, distribution, use, and final disposal. For EVs, CO₂ emissions depend on the local fuel mix used to generate the electricity. Emissions can be as low as 0.2 lb per mile driven when the electricity comes from zero carbon sources or can increase to as much as a hybrid, if the electricity mix contains fossil fuel energy sources. In the case of zero carbon sources, the 0.2 lb CO₂/mile production comes from vehicle and battery manufacturing.

Another factor to consider is the eventuality that someday crude oil will not be readily available. Currently, worldwide reserves are around 1.7 trillion barrels, a number which can grow with improved oil development, such as deep-water drilling and hydraulic fracking. However, this will also increase crude oil prices. Using typical pre-pandemic worldwide consumption of 98 million barrels per day, there are about 47 years remaining for crude oil. The beauty of the EV is that it links transportation with electricity, and electricity can be generated with many energy sources besides fossil fuels.

EVs also have some issues, most notably charging time, range, and price. With respect to charging time, a typical 110 V Level One outlet will add about 5-10 miles of range per hour of charging (RPH). A Level Two 240 V system has an RPH of about 15-25, and the direct current (DC) fast chargers have an RPH of about 100. The number of DC units in the US is currently more than 10,000, a number expected to grow rapidly but lagging far behind the approximately 150,000 gasoline and diesel stations in the US. Also, a typical fueling time for an ICE is 5 minutes during which 500 miles of range can be added.

Range is also an issue, as EVs typically have a driving range of less than 300 miles and more typically about 100-200 miles. In contrast, many ICEs have ranges of 500 miles or more. And the EV is more expensive than ICEs, although the difference will depend on the EV model. For example, the Tesla Model X EV costs around $80,000 versus $32,000 for the Nissan Leaf EV. Earlier it was shown that an ICE costs about $0.12 per mile driven versus $0.03 for an EV, a $0.09 per mile advantage for the EV. According to the US Department of Transportation Federal Highway Administration, Americans drive about 13,500 miles per year. Therefore, on the basis of fuel cost alone, the EV saves about $1,200/year. Considering sticker price alone, it will take close to 17 years to break even if the EV costs $20,000 more than the ICE.

In summary, if the US and world are ever going to have a transportation market that is fossil-fuel free, the current choices are the hydrogen-powered FCV and the EV. While the FCV has the advantage of a rapid charging time equivalent to gasoline and a decent driving range, it will require a lot of new infrastructure, a reduction in hydrogen fuel cost, and better ways to store hydrogen onboard the vehicle than the current method of high-pressure hydrogen. Since the EV can use the existing electric infrastructure, only charging stations are needed versus hydrogen production, distribution, and fuel stations for the FCV. However, EVs currently suffer from long recharging time, short driving range, and price. Current US market penetration shows more than one million EVs and 6,500 FCVs compared to more than 278 million gasoline vehicles. As battery technology and range improve, prices decrease, and more DC fast charging stations become available, market penetration is expected to rapidly increase.

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