ELECTRIC VEHICLES IN A DISTRIBUTED AND INTEGRATED MARKET USING SUSTAINABLE ENERGY AND OPEN NETWORKS REPORT: WP1.6 ELECTRIC VEHICLE TOTAL COST OF OWNERSHIP Type: Deliverable Identifier: D1.6.2 Classification: External report Version: 1.0 Editors: Jan Rasmussen, DEA Date: April 12, 2012 Copyright EDISON Consortium. 2011. All Rights Reserved Page 1 of 11
CONTENT 1 SUMMERY... 3 2 TCO Analysis... 3 3 Appendix A... 8 3.1 Breakdown of costs 2012... 8 3.2 Breakdown of costs 2015... 9 3.3 Breakdown of costs 2020... 10 3.4 Breakdown of costs 2030... 11 Copyright EDISON Consortium. 2011. All Rights Reserved Page 2 of 11
1 SUMMERY This is the second report from work package 1.6 of the EDISON project. As the first report was dealing with EVs from a socio economic perspective, this report deals with the costs related to EVs from a customer perspective. The following total cost of ownership shows the cost of owning four different cars two conventional cars and two electric vehicles for a period of five years. Currently one of the ICE-cars turns out to be the cheapest option. The EVs are competitive though, and from 2015 an EV is expected to be become the cheapest option. The analysis shows that small economic incentives like free parking of EVs potentially can have a significant impact on the total cost of ownership and thereby be an effective way to promote the roll-out of EVs. 2 TCO ANALYSIS Total cost of ownership (TCO) is a financial estimate whose purpose is to help consumers and enterprise managers determine direct and indirect costs of a product or system. The TCO concept is widely used in the transportation industry. The TCO defines the cost of owning an automobile from the time of purchase by the owner, through its operation and maintenance to the time it leaves the possession of the owner. Comparative TCO studies between various models help consumers choose a car to fit their needs and budget. The following is a summary of the expected costs of four cars two EVs (Renault Fluence and Nissan Leaf) and two ICEs (Kia Cee d and VW Jetta) * - for the years 2012, 2015, 2020 and 2030. It is necessary to introduce a number of assumptions especially for the years 2020 and 2030: Development of prices for ICE and EV cars and improvements in energy efficiency are based on the report Reduction in CO2 emissions by increased use of electric vehicles by the EDISON Consortium. EVs are assumed to be exempted from the registration tax also in 2015 a promise made by the former and the present Danish governments. * Prices listed according to the homepage of Better Place, Nissan, Kia and Volkswagen as of January 2012. http://orbit.dtu.dk/getresource?recordid=316949&objectid=1&versionid=1 Copyright EDISON Consortium. 2011. All Rights Reserved Page 3 of 11
The TCO-analysis shows the ICE car as the cheapest option in 2012, whereas the EV s are the cheapest options in 2015. In 2020 the Leaf is cheapest. Also in 2030 the Leaf is expected to be the cheapest option closely followed by the Kia and Renault, cf. table and figure 1. Renault Fluence Nissan Leaf Kia Cee'd 1,6 VW Jetta 1,4 TSI 2012 4,11 4,02 3,84 4,50 2015 3,76 3,52 3,81 4,74 2020 3,87 3,67 3,83 4,77 2030 3,68 3,40 3,63 4,50 Table 1: TCO DKR/km (20.000 km/year) 2012 2015 2020 2030 5,00 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 Renault Fluence Nissan Leaf Kia Cee'd 1,6 VW Jetta 1,4 TSI Figure 1: TCO DKR/km (20.000 km/year) Copyright EDISON Consortium. 2011. All Rights Reserved Page 4 of 11
In table 2 a green change has been made as the EVs are exempted from paying parking fees. The result is that EV s becomes the cheapest option in all the years except 2012. This indicates that incentives like free parking etc. potentially can have a major impact on the roll-out of EV s. Renault Fluence Nissan Leaf Kia Cee'd 1,6 VW Jetta 1,4 TSI 2012 3,99 3,90 3,84 4,50 2015 3,63 3,40 3,81 4,74 2020 3,74 3,55 3,83 4,77 2030 3,56 3,28 3,63 4,50 Table 2: TCO DKR/km (20.000 km/year) with a green parking fee 2012 2015 2020 2030 5,00 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 Renault Fluence Nissan Leaf Kia Cee'd 1,6 VW Jetta 1,4 TSI Figure 2: TCO DKR/km (20.000 km/year) with a green parking fee Some of the key elements incorporated in the cost of ownership for a vehicle include depreciation, fuel, insurance, taxation and factors like cost of parking. Copyright EDISON Consortium. 2011. All Rights Reserved Page 5 of 11
Depreciation is the largest cost factor. Depreciation is a vehicle's loss in value over a defined period. According to Consumerreports.org the average model depreciates about 65 percent over five years. Some vehicles depreciate faster than others because of oversupply, limited appeal, or rebates on similar new models. Depreciation data for the present EVs remains to be seen. The depreciation of the ICE car is set to 60 per cent and the EVs to 70 per cent. The difference is due to an expected fast development of the EV-technology in the coming years. This may result in a relatively faster depreciation. It remains to be seen, if the Nissan Leaf depreciates faster than the Fluence, where the battery is leased and as such is taken out of the calculation. If the Fluence is sold after five years or the subscription is cancelled, it will not be able to function without the purchase or lease of a battery. Fuel costs can add up, especially for non-a og B marked cars or SUVs for that matter. To calculate fuel costs, we assume the vehicles are driven 20.000 km a year. Projections of energy efficiency is based on the EDISON Consortium-report, and projections of prices of gasoline and electricity are based on the Danish Energy Agency s forecast, cf. table 2 Projection of prices 2012 2015 2020 2030 Gasoline 1,00 1,04 1,10 1,18 Electricity 1,00 1,00 1,05 1,07 Table 2: Projection of gasoline and electricity prices Note: Based on Energy Agency, DTU Transport and own calculations The price for a litre of gasoline in 2012 is set to DKR 11,21. Projections of future costs are based on a 2009 forecast made by The Danish Energy Agency, further adapted to energy taxes by the Technical University of Denmark (DTU) and projections of energy efficiency is based on the EDISON Consortium-report. The price of gasoline is somewhat underestimated in light of the present level of DKR 13. http://www.dtu.dk/upload/institutter/dtu%20transport/data- %20og%20modelcenter/transportoekonomiske%20enhedspriser/transportøkonomiske%20enhedspriser%20vers%201.3%20ju l10.xls Copyright EDISON Consortium. 2011. All Rights Reserved Page 6 of 11
When it comes to the EVs, the cost depends on the price pr kwh for the Nissan Leaf whereas fuel is included in the packaged with the Fluence. The price of a kwh in 2012 is set to DKR 1,91. The price of the Better Place subscription can go up or down depending on the intensity of the competition, opportunities of bundling, a more flexible price scheme for electricity etc. The price is assumed to remain at its present level. Included in the TCO for the Nissan Leaf is the expense for a home charging device priced at DKR 10.000. Insurance costs vary depending on many factors, including age, location, and driving record. And they can boost the ownership costs of models that otherwise would seem affordable. The insurance company Tryg advertises a 40 per cent discount when insuring an EV. Insurance costs can be a decisive factor for especially younger persons, as the cost of entering the market can be quite high. EVs (unless it s a sports car like a Tesla) can be said to attract environmental worried people with sensible driving habits. They should therefore be cheaper to insure. Financing: The price of the car and any subscription cost is financed entirely by a loan (5 year maturity and 8 percent in interest). Other costs include 1,5 per cent in stamp duty, 1.400 kr. for registration and 850 kr in the pledgee labeling, 2 per cent in service charge and 750 kr in handling fee for the mortgage deed. Fees and taxes: The calculations are based on the present Danish tax system including the expected exemption of EVs from registration tax till the end of 2015. The tax regime is expected to change in the medium term, as the government has announced a change of the taxation of cars to reward green vehicles. The design of a future system is not know at this time. Repairs and maintenance costs: This cost is expected to be 12.000 DKR a year for the ICE car and 10.000 DKR for the EVs. The expected difference is due to the simpler construction of the EV without an exhaust system etc. Copyright EDISON Consortium. 2011. All Rights Reserved Page 7 of 11
3 APPENDIX A 3.1 BREAKDOWN OF COSTS 2012 2012 Renault Fluence Nissan Leaf Kia Cee'd 1,6 VW Jetta Fixed costs Car price 208.680 290.000 225.000 332.888 Green taxes p.a. 0 0 1.600 1.600 Subscription p.a. 1.999 - - Variable costs p.a. Subscription 22.740 - - Charging station 2.000 Fuel - 6.000 14.371 9.284 Insurance 4.800 4.800 8.000 8.000 Maintenance and tires 10.000 10.000 12.000 12.000 Capital costs p.a. Interest costs 11.009 14.554 11.323 16.682 Depreciation 29.215 40.600 27.000 39.947 Total costs p.a. 79.763 77.954 74.294 87.513 Total costs pr. km. p.a. 3,99 3,90 3,71 4,38 Other factors p.a. Parking 2.500 2.500 2.500 2.500 All included p.a. 82.263 80.454 76.794 90.013 All included pr. km. p.a. 4,11 4,02 3,84 4,50 Copyright EDISON Consortium. 2011. All Rights Reserved Page 8 of 11
3.2 BREAKDOWN OF COSTS 2015 Renault Fluence Kia Cee'd 1,6 VW Jetta 2015 Nissan Leaf Fixed costs Car price 171.118 238.214 222.491 357.049 Green taxes p.a. 0 0 1.600 1.600 Subscription p.a. 1.999 Variable costs p.a. Subscription 22.740 Charging station 2.000 Fuel - 5.825 14.257 10.004 Insurance 4.800 4.800 8.000 8.000 Maintenance and tires 10.000 10.000 12.000 12.000 Capital costs p.a. Interest costs 9.146 11.980 11.200 17.884 Depreciation 23.956 33.350 26.699 42.846 Total costs p.a. 72.641 67.955 73.756 92.334 Total costs pr. km. p.a. 3,63 3,40 3,69 4,62 Other factors p.a. Parking 2.500 2.500 2.500 2.500 All included p.a. 75.141 70.455 76.256 94.834 All included pr. km. p.a. 3,76 3,52 3,81 4,74 Copyright EDISON Consortium. 2011. All Rights Reserved Page 9 of 11
3.3 BREAKDOWN OF COSTS 2020 Renault Fluence Kia Cee'd 1,6 VW Jetta 2020 Nissan Leaf Fixed costs Car price 182.595 253.750 225.000 361.076 Green taxes p.a. 0 0 1.600 1.600 Subscription p.a. 1.999 Variable costs p.a. Subscription 22.740 Charging station 2.000 Fuel 5.881 14.125 9.911 Insurance 4.800 4.800 8.000 8.000 Maintenance and tires 10.000 10.000 12.000 12.000 Capital costs p.a. Interest costs 9.712 12.755 11.323 18.086 Depreciation 25.563 35.525 27.000 43.329 Total costs p.a. 74.815 70.960 74.048 92.927 Total costs pr. km. p.a. 3,74 3,55 3,70 4,65 Other factors p.a. Parking 2.500 2.500 2.500 2.500 All included p.a. 77.315 73.460 76.548 95.427 All included pr. km. p.a. 3,87 3,67 3,83 4,77 Copyright EDISON Consortium. 2011. All Rights Reserved Page 10 of 11
3.4 BREAKDOWN OF COSTS 2030 Renault Fluence Kia Cee'd 1,6 VW Jetta 2030 Nissan Leaf Fixed costs Car price 163.218 226.821 207.435 332.888 Green taxes p.a. 0 0 1.600 1.600 Subscription p.a. 1.999 Variable costs p.a. Subscription 22.740 Charging station 2.000 Fuel 5.542 13.231 9.284 Insurance 4.800 4.800 8.000 8.000 Maintenance and tires 10.000 10.000 12.000 12.000 Capital costs p.a. Interest costs 8.749 11.417 10.454 16.682 Depreciation 22.850 31.755 24.892 39.947 Total costs p.a. 71.139 65.514 70.177 87.513 Total costs pr. km. p.a. 3,56 3,28 4 4,38 Other factors p.a. Parking 2.500 2.500 2.500 2.500 All included p.a. 73.639 68.014 72.677 90.013 All included pr. km. p.a. 3,68 3,40 3,63 4,50 Copyright EDISON Consortium. 2011. All Rights Reserved Page 11 of 11