Forecasting the value of battery electric vehicles compared to internal combustion engine vehicles: the influence of driving range and battery technology (1806.06947v1)

Abstract: Battery electric vehicles (BEVs) are now clearly a promising candidate in addressing the environmental problems associated with conventional internal combustion engine vehicles (ICEVs). However, BEVs, unlike ICEVs, are still not widely accepted in the automobile market but continuing technological change could overcome this barrier. The aim of this study is to assess and forecast whether and when design changes and technological improvements related to major challenges in driving range and battery cost will make the user value of BEVs greater than the user value of ICEVs. Specifically, we estimate the relative user value of BEVs and ICEVs resulting after design modifications to achieve different driving ranges by considering the engineering trade-offs based on a vehicle simulation. Then, we analyze when the relative user value of BEVs is expected to exceed ICEVs as the energy density and cost of batteries improve because of ongoing technological change. Our analysis demonstrates that the relative value of BEVs is lower than that of ICEVs because BEVs have high battery cost and high cost of time spent recharging despite high torque, high fuel efficiency, and low fuel cost. Moreover, we found the relative value differences between BEVs and ICEVs are found to be less in high performance large cars than in low performance compact cars because BEVs can achieve high acceleration performance more easily than ICEVs. In addition, this study predicts that in approximately 2050, high performance large BEVs could have higher relative value than high performance large ICEVs because of technological improvements in batteries; however low performance compact BEVs are still very likely to have significantly lower user value than comparable ICEVs until well beyond 2050.

• The paper introduces a relative user value index that shows BEVs currently lag behind ICEVs due to high battery costs and longer charging times.
• The study reveals that BEVs in high performance large vehicles gain acceleration benefits, narrowing the value gap compared to low performance compact models.
• The forecast predicts that Li-ion battery advances will boost BEV value in high performance segments by 2050, while ICEVs retain an edge in compact vehicles.

Analysis of User Value Forecasts for BEVs and ICEVs: Technological Influences and Market Implications

The critical assessment of battery electric vehicles (BEVs) compared to internal combustion engine vehicles (ICEVs) in terms of user value provides insights into the technological improvements and market trajectories for the automobile sector. This research paper presents a detailed forecasting paper to determine when BEVs might surpass ICEVs in terms of user utility by analyzing the impact of driving range and battery technology enhancements.

The authors have devised a relative user value index that takes into account attributes distinct to both ICEVs and BEVs, such as purchase cost, operating and fuel costs, acceleration performance, and refueling/charging time. They utilized this index to simulate scenarios using representative examples of low performance compact and high performance large vehicles, taking into consideration technological trade-offs, including energy density and battery costs, that affect the future valuation of these vehicles.

Key Findings

• Relative Value Insights: The assessment reveals that BEVs currently hold a lower relative value than ICEVs due to high battery costs and the increased time spent on recharging. Despite their advantages in torque, fuel efficiency, and lower fuel cost, these positive aspects are overshadowed by the economic drawbacks of current battery technologies.
• Performance Variability: The relative value disparity is narrower in high performance large vehicles compared to low performance compact vehicles. This is attributed to the ability of BEVs to achieve superior acceleration performance more easily, courtesy of electric motor efficiency.
• Forecast for Technological Improvements: By 2050, technological improvements in Li-ion batteries, particularly in cost and energy density, are projected to elevate the relative value of BEVs in the high performance segment beyond that of ICEVs. However, this transition does not extend to low performance compact vehicles, where ICEVs are expected to maintain a superior value proposition well beyond this time frame.

Methodological Approach

The research employs NREL’s FASTSim software to simulate and analyze the engineering trade-offs in both vehicle types. The simulation parameters include modifications to energy storage capacity, which affect metrics such as driving range, vehicle weight, and cost implications. In the futuristic analysis, the generalized Moore’s Law (GML) framework is applied to forecast improvements in battery technology, projecting a 5% annual increase in energy density and a 10% annual reduction in costs.

Implications for the Automotive Industry

Practically, the findings suggest a continued dominant role for ICEVs in the mass market, particularly among low performance compact cars. The conclusions also highlight the importance of optimizing BEV design for lower range in this segment to maximize user value. This presents automakers with a strategic challenge of balancing performance enhancements with cost-effective technological developments in battery systems.

Theoretically, this research underscores the necessity of continued investment in battery technologies to narrow the gap in user value. It also invites further exploration into alternative energy storage technologies that, although not covered in this paper, have the potential to impact market preferences significantly.

Speculations and Future Directions

The paper's findings point towards a sustained demand for ICEVs in the mass market segment, barring breakthroughs in Li-ion technology or adoption of radically new storage technologies, such as capacitors or advanced fuel cells. Additionally, changes in market dynamics due to the rise of autonomous cars or increased importance of shared mobility models could significantly alter future landscape of automobile value propositions, potentially benefiting BEVs as operational patterns evolve.

In conclusion, while technological progress promises eventual BEV competitiveness in select market segments, challenges remain in realizing wide-scale adaptation in the broader automotive market. Researchers should expand upon this work by considering additional variables such as regulatory changes, consumer behavior shifts, and unanticipated technological leaps.