Electric vehicle costs and consumer benefits in Colorado in the 2020–2030 time frame
In adopting zero-emission vehicle (ZEV) regulations, questions remain regarding how quickly electric vehicle costs are declining and the magnitude of consumer benefits compared to conventional vehicles. This paper analyzes these two questions in the context of Colorado’s potential adoption of a ZEV regulation. The paper analyzes electric vehicle prices and consumer benefits for the Colorado light-duty vehicle market from 2023 through 2030.
Electric vehicles’ additional costs to consumers are expected to decline from $4,200 in 2023 to $500 in 2026, before providing a cost benefit to consumers from $500 in 2027 to more than $3,000 in 2030. After vehicle purchase, the average first-owner benefits over 5 years are between $2,700 and $3,200 per vehicle, including costs related to a home charger and the fuel and maintenance savings. After the first vehicle owner, the secondary effects over the life of the vehicle are even greater, from $5,900 to $6,300 per vehicle, largely due to fuel and maintenance savings. Total net lifetime effects increase from approximately $4,800 to $12,000 per vehicle from 2023 to 2030.
The analysis also shows:
Declining battery costs will make electric vehicles less expensive than conventional vehicles. In terms of upfront purchase cost, battery electric vehicles with up to 200 miles of range reach price parity with conventional gasoline vehicles by 2024–2026. Longer-range electric vehicles reach cost parity in 2027–2029. If first-owner fuel and maintenance savings are accounted for, battery electric vehicle price from 2022–2027.
Electric vehicle benefits greatly exceed costs for the consumer. Battery electric cars, crossovers, and SUVs with up to 300 miles of range deliver net benefits over their lifetime ranging from $3,200 to $12,000 per vehicle to drivers in Colorado by 2025. Although plug-in hybrid electric vehicles do not reach price parity for first owners of the vehicles, these vehicles deliver lifetime benefits exceeding upfront costs for cars and crossovers by $1,400 to $2,700 per vehicle.
By incorporating a mix of electric vehicle technologies across vehicle classes, the benefits of a Colorado ZEV regulation would exceed the cost for consumers. For a 2023–2025 ZEV regulation, vehicle price increases of $155 million to $223 million would result in $589 million to $669 million in benefits—over 3 times greater benefits than costs. The benefits of a ZEV regulation, if extended through new 2030 vehicles, would be much greater, delivering up to $3 billion for Colorado drivers.