20. Comparison of Economic Viability of Electric and Internal Combustion Engine Vehicles Based on Total Cost of Ownership Analysis

Global climate change and local air quality concerns due to transport activities have led to several governmental interventions to accelerate the transition of internal combustion engine vehicles (ICEVs) powered transport sector to alternative powertrains such as battery electric vehicles (BEVs). In today’s world, every county is aiming for sustainable development. There are questions about the sustainability of BEVs which need to be answered. There are three main pillars of sustainability: environment, economy, and social. This study reviews the comparison of BEVs and ICEVs based on the total cost of ownership (TCO), a tool for ensuring economic sustainability. TCO varies from country to country and their policies. This chapter reveals that for a BEV to be TCO-competitive without subsidies/incentives, the initial purchase price of the vehicle needs to be reduced substantially or the average annual distance travelled must be increased severalfold. Technological innovations and economies of scale will reduce the price of a BEV; however, this will take a long time to materialize. From a TCO perspective, a BEV can be  cost-competitve only in high mileage use cases, such as taxi fleet operators or ride-hailing companies, and it’s not competitive for most private car owners.