nImproved fuel efficiency of light duty vehicles (cars and trucks) in the last decade has made an important contribution to reducing the EU’s CO2 emissions, and has had wider benefits to vehicle users and society such as lower fuel costs, improved local air quality (particularly in the case of hybrid and electrified power trains), and reduced reliance on imported oil. The CO2 standards Regulation (EC) No 443/2009, first introduced in 2009, required average new car emissions to be no higher than 130 gCO2/km (measured on the NEDC standardized test) in 2015 and has set a target of 95 gCO2/km (NEDC) in 2021. This has led to a considerable decline in the NEDC type-approval emissions of new cars, with the 2015 average standing at 119 gCO2/km, having met the 130 gOC2/km target nearly 3 years early. Despite adding to the cost of the vehicles, the reduced fuel consumption from this regulation has resulted in a negative cost of CO2 saving, shown to be on average -€46.4/ton CO2 in 2013. This has led a fall in the total costs of ownership for car drivers in the EU.
In order to accommodate car OEMs’ 5-7 year development cycles, attention is now turning to the decarbonization pathway for the 2020s, which will likely include a new CO2 target for 2025. The European Commission has put in place ambitious climate goals, such as a 30% reduction in non-Emissions Trading Scheme sector emissions between 2005 and 2030, and an 80% reduction in overall emissions in 2050 from 1990 levels. To be met, these will require further improvement to the efficiency of conventional vehicles, as well as widespread deployment of ultra-low carbon technology, such as plug-in vehicles and hydrogen fuel cells.
Accordingly, now is a suitable time to assess the future cost impacts of low and ultra-low emission vehicles on private and fleet vehicle users, in particular whether improved fuel efficiency continues to offset the higher capital cost, and the competitiveness of ultra-low emission vehicles on a total cost of ownership basis. Element Energy was commissioned by BEUC to carry out such an analysis, coordinating a "Roundtable on Sustainable Mobility" including representatives from consumer organizations, lease companies and NGOs to agree data inputs for a comprehensive study on the TCO of cars likely to be sold in the future in Europe.
This report first forecasts changes to the costs and efficiency of conventional petrol and diesel cars, such as internal combustion engine vehicles (ICEs) and full hybrids (HEVs), as well as ultra-low and zero emission power trains, such as plug-in hybrid electric vehicles (PHEVs), battery electric vehicles (BEVs) and H2 fuel cell vehicles (FCVs). This is based on the latest evidence for future technology deployment, component costs, running costs (e.g. fuel costs, depreciation, maintenance and insurance), accounting for fuel consumption in real world driving.
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