Electric Vehicles Revisited – Costs, Subsidies and Prospects

This paper compares the lifetime costs of like internal combustion and battery electric vehicle pairs on the market in France and finds that relative costs of electric vehicles remain elevated for consumers and even more so for society under current conditions and typical use scenarios. It also suggests that in those cases where electric vehicles do already compare favourably to internal combustion engine powered cars, subsidies may be superfluous. In the future, a number of simultaneous changes in battery electric vehicles (BEV) and ICE technology, fiscal regimes and prevailing energy prices might reduce and even eradicate the consumer cost differential in favour of ICEs. Reducing the social cost differential between BEVs and ICEs seems more challenging under most scenarios and, when successful, raises the question of how much should society seek to subsidise BEVs in instances where there begins to be a business case for them.