The total cost of electric vehicle ownership: A consumer-oriented study of China's post-subsidy era

The withdrawal of the purchase subsidy and the spread of Covid-19 have had a significant effect on Chinese consumers' purchase intentions regarding electric vehicles (EVs). Therefore, it is worthwhile analyzing the factors influencing EV purchase decisions from the consumer's perspective. We use a consumer-oriented model to analyze the total cost of ownership over 5- and 10-year holding periods in China for internal combustion engine vehicles, plug-in hybrid electric vehicles (PHEVs), and battery electric vehicles (BEVs). We include consumer usage habits and non-monetary costs to reflect consumer characteristics. The results show that the small BEVs will achieve parity before 2025, while medium-sized and large BEVs will do so around 2030. Regarding PHEVs, large and medium-sized models show better performance. Even though BEV and PHEV purchase costs will fall by 31%-36% and 16%-18%, respectively, between 2020 and 2030, most EV models will still not reach purchase cost parity by 2030. Incentive policies will have a significant impact, and oil prices are likely to have a huge impact on the time until EVs reach parity. Thus, policy-makers should introduce incentive policies aimed at ensuring a smooth transition to the electrification of China's vehicle fleet.

Automated summary

This study analyzes the purchase cost of electric vehicles in China, finding that small EVs will achieve cost parity first, while PHEVs and large/medium-sized EVs will reach cost parity within the next few years. Despite decreasing purchase costs, most EV models will still not reach cost parity by 2030.