Life-Cycle Cost of Transportation Services

Life-Cycle Cost of Transportation Services

May 2020Working Paper No. 3868

The rapid deployment of electric vehicles is widely viewed as a promising path towards decarbonizing the transportation sector. The pace at which electric vehicles will replace those with internal combustion engines will depend to a large extent on cost. We present and analyze a generic life-cycle cost model in which operating costs are presumed to be driven by hours of operation. Our model framework yields critical utilization rates for ranking multiple drivetrains in terms of cost. The critical utilization rate is also shown to be the relevant criterion for optimally configuring a mix of multiple drivetrains within a fleet. We calibrate our model framework in the context of an urban transit buses system and examine how the cost comparison between diesel and battery-electric buses depends on the specifics of the duty cycle (route). Our findings suggest that even under less favorable duty cycles, battery-electric buses will entail lower life-cycle costs once utilization rates exceed approximately 20%.

Keywords
transportation services, electric vehicles, life-cycle cost, fleet cost