What is TCO?
TCO is an acronym that stands for Total Cost of Ownership: it includes the cost of purchasing and operating an asset, considering its entire life cycle. This cost calculation can be performed for many items, including cars.
TCO for electric vehicles
Despite the increasing supply of #BEVs and the increase in their range, one of the barriers to their commercial success remains their much higher purchase cost compared to vehicles with internal combustion engines. However, an appropriate economic comparison must consider not only the initial investment, but also the costs that the owner will incur over time.
Applying the TCO method to #electric vehicles shows that, for a higher purchase cost, they have lower running costs in terms of, for example, fuel (namely #energy) and maintenance.
The competitive advantage of electric vehicles
At the Politecnico di Milano (Milan Polytechnic University), a comparative #economic analysis of electric vehicles in comparison with a range of alternative forms of power was performed. A simulation model based on the TCO concept was used, which includes a set of cost items, modelled on the purchase, use and end-of-life phases of the vehicle. The application of the model to the Italian market considered electric vehicles along with five other selected typologies, namely petrol, diesel, methane, LPG and non-plug-in hybrids; in this comparative study, the categories of cars typical of the Italian market were also analysed, therefore A (small), B (utility), C (medium-sized cars) and D (medium-large cars).
What emerged is that BEVs have a lower total cost of ownership among the types of power plant examined, in segments A and C; this result is mainly due to the presence of incentives for the purchase of BEVs and the lower costs of use compared to other types of engine, which compensate for the higher purchase price. It was also shown that the high purchase price of BEVs negatively affects cost competitiveness in the comparison with segments B and D.
To find out more, follow this link to view the above-mentioned article: https://www.sciencedirect.com/science/article/abs/pii/S095965262202159X?dgcid=author
