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Throughout this paper, we use the terms ‘electric car’, ‘fully electric car’, and ‘battery-electric vehicle (BEV)’ for passenger cars that are propelled by one or multiple electric motors and draw their propulsion energy solely from an electric battery. The results will help policy makers to devise incentives that effectively support the electrification of road transport. The focus is on the time period between 20, for which we: (i) explore price trends and establish experience curves, (ii) conduct a time-series analysis of user costs, and (iii) assess the costs for mitigating CO 2 and air pollutant emissions. This paper assesses the techno-economic performance of fully electric and plug-in hybrid cars sold in Germany - a country that constitutes the largest passenger car market in the EU with 3.4 million vehicle registrations in 2016 ( KBA, 2016).
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If so, electric and plug-in hybrid cars are not just becoming financially more attractive to consumers but also economically more efficient in mitigating the negative impacts of road transport ( Helmers, 2010 Cames and Helmers, 2013 Degraeuwe et al., 2016). Both studies demonstrate a robust trend towards declining prices, implying that user costs and the costs for mitigating carbon dioxide (CO 2) and air pollutant emissions through electrified vehicles may follow alongside. Technological learning has been quantified for non-plug-in hybrid cars ( Weiss et al., 2012a) and more recently for a small sample of electric cars ( Safari, 2017). Specifically relevant to this context is technological learning - that is a decrease in production costs and improvements in product attributes through the combined effect of economies of scale, learning by doing, or learning by searching. If these targets are to be achieved, persisting market barriers need to be removed by policy interventions that, in turn, require a good understanding of consumer preferences ( Green et al., 2014) and techno-economic progress ( IEA, 2016, IRENA, 2017a, IRENA, 2017b). Germany aims at having 1 million electric and plug-in hybrid cars on the roads by the same year ( BR, 2016a). China and the USA, for example, aim at operating 5 million ( SC, 2012) and 1.2 million electric vehicles ( IA-HEV, 2015), respectively by 2020. The situation has been addressed, in part, by government incentives linked to ambitious deployment targets ( IA-HEV, 2015 BR, 2016a IEA, 2017). However, even a decade after their introduction into the mass-vehicle market, they continue to face important market barriers including high prices, short drive ranges, long recharging times, and an insufficient recharging infrastructure ( Bonges and Lusk, 2016 Coffman et al., 2017 Gissler et al., 2016 Nilsson and Nykvist, 2016 FC, 2017 Liuima, 2017). Overall, the observation of robust technological learning suggests policy makers should focus their support on non-cost market barriers for the electrification of road transport, addressing specifically the availability of recharging infrastructure.įully electric and plug-in hybrid cars have become increasingly popular, reaching market shares of 29% in Norway, 6% in the Netherlands, and 1.5% in China, France, and the UK ( IEA, 2017).
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However, at current levels, NO X and particle emissions are still mitigated at lower costs by state-of-the-art after-treatment systems than through the electrification of powertrains. Also the costs for mitigating CO 2 and air pollutant emissions through the deployment of electrified cars tend to decline. The user costs of electric and plug-in hybrid cars relative to their conventional counterparts are declining annually by 14% and 26%. If trends persist, price beak-even with conventional cars may be reached after another 7 ± 1 million electric cars and 5 ± 1 million plug-in hybrids are produced. We find that between 20, the prices and price differentials relative to conventional cars declined at learning rates of 23 ± 2% and 32 ± 2% for electric cars and 6 ± 1% and 37 ± 2% for plug-in hybrids. This article presents experience curves and cost-benefit analyses for electric and plug-in hybrid cars sold in Germany.