Transportation's Role in Reducing U.S. Greenhouse Gas Emissions ...

Transportations Role in Reducing U.S. Greenhouse Gas Emissions: Volume 2
$1,000 per vehicle), but should be more than paid back in fuel savings over the life of the
vehicle. 5
Replacing conventional gasoline vehicles with comparable diesel vehicles can provide
substantial per-vehicle reductions in GHG emissions, about 16 percent, due to inherent
efficiencies in the diesel engine cycle. Light-duty diesel vehicles, while common in
Europe, are almost absent from the U.S. market, and would require ramping up of
production and marketing in order to make substantial inroads in the light-duty fleet.
However, diesel vehicles will face a difficult challenge obtaining market share, having to
compete with advanced conventional gasoline vehicles whose future fuel efficiency levels
may approach those of diesels, and at lower overall costs. Light-duty diesels are up to
$2,000 higher in price than gasoline vehicles due to required engine differences and
pollutant controls; they may or may not provide a lifetime cost savings, depending upon
their relative efficiency compared to gasoline vehicles and the relative price difference of
the fuels.
Hybrid electric vehicles (HEV) can reduce fuel consumption and GHG emissions per
vehicle between 26 and 54 percent compared to conventional gasoline vehicles. Although
comprising less than 2 percent of the current fleet, HEV market shares are rising rapidly,
with numerous models existing or planned for launch by various manufacturers. HEVs
have a cost premium of roughly $4,500 per vehicle in the near term, although these costs
are expected to fall somewhat in the future, to about $3,000 per unit; fuel cost savings
could potentially lead to a net savings over the vehicle’s lifetime as production costs come
down. The incremental benefits of HEVs are diminished somewhat as advanced gasoline
vehicle market shares increase, and HEV cost-effectiveness relative to these vehicles is not
nearly as favorable as compared with conventional (current technology) gasoline vehicles.
Plug-in hybrid electric vehicles (PHEV) are estimated to reduce GHG emissions by 46 to
70 percent per vehicle in the medium term and 49 to 75 percent in the long term, assuming
a move towards increasingly less GHG-intensive sources of electricity generation. PHEV
battery technology and cost concerns must still be addressed in order to obtain significant
market share in the future. PHEV battery costs currently are prohibitively high (about
$16,000 per vehicle), although projections for future year batteries suggest a cost
increment of $3,000 to $8,000 in the medium to long term (depending upon the vehicle’s
all-electric range), which would yield net cost savings over the life of the vehicle due to
fuel savings. GHG reductions and cost-effectiveness for PHEVs are very sensitive to the
fuel used to generate the electricity used to charge the battery. In the absence of
substantial improvements in electricity GHG intensity, the potential GHG reductions for
PHEVs become more comparable to HEVs, yet costs are greater, so cost-effectiveness is
lower than for HEVs.
5 All of the cost-effectiveness estimates presented in this section are sensitive to the projected cost
of fuel in the analysis year. Cost assumptions are from the AEO 2009 Reference case for 2030 and
include: gasoline and diesel – $3.43 (pre-tax); railroad diesel $3.67; jet fuel $3.33; marine bunker
fuels $2.82. See Appendix A for a more detailed discussion of cost calculations.
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