COMPREHENSIVE VEHICLE TOTAL COST OF OWNERSHIP (TCO) FRAMEWORK

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DAVID GOHLKE (PRESENTING)Argonne National Laboratory

VTO Annual Merit ReviewJune 22, 2021

This presentation does not contain any proprietary, confidential, or otherwise restricted information.

PROJECT ID: VAN038

2021 U.S. Department of Energy

Vehicle Technologies Office

Annual Merit Review

Overview

2

Timeline Barriers addressed

• Project start: October 1, 2019

• Project end: March 31, 2021

• 100% complete (1.5 years)

• “Fill gaps or deficiencies in the analysis

toolset based on the best publicly

available, up to date techno-economic

assessments.” (ISATT roadmap, 2018)

Budget Partners

• Total project funding: $510,000

(100% DOE share)

• All funding from FY 2020 or forward-

funded from FY 2019

• No FY 2021 funding

• Collaboration across several DOE labs:

• Lawrence Berkeley National Laboratory

• National Renewable Energy Laboratory

• Oak Ridge National Laboratory

• Sandia National Laboratories

Relevance

3

DOE VTO is interested in being able to compare economics of vehicle operation

across multiple technologies in a balanced manner

In order to accurately compare the costs of two vehicles, the total cost of ownership (TCO)

should consist of all costs related to both purchasing and operating the vehicle.

This TCO analysis builds on previous work to provide a comprehensive, internally

consistent perspective of all relevant vehicle costs of ownership for light-duty vehicles

(LDV) and medium/heavy duty vehicles (MHDV).

Data from this project is made public so that future researchers can build upon our

framework.

Relevance

Approach – General

4

Approach/Strategy

Quantify the Total Cost of

Ownership (TCO) and Levelized

Cost of Driving (LCOD) for

scenarios of interestIdentify and fill gaps in

knowledge for major cost

components of vehicle

ownership and operation

Develop framework for

calculating total cost of

ownership based on

discounted cash flow

Approach – Milestones

5

Multiple tasks spread across multiple labs. Key tasks presented here

No FY2021 milestones or go/no-go decision points remaining

Tasks SubtasksFY2020 FY2021

Q1 Q2 Q3 Q4 Q1 Q2 Q3

Cost factors

Identify R&D gaps

Gather data

Quantify each factor

SynthesisFramework

Cross-factor linkage

Collaboration Workshops

Online data Web tool

PublicationDraft report

Final report

Approach/Strategy

Approach – Scope

6

Modeled vehicles from Autonomie with varying sizes, vocations, powertrains, and

technological advancement

Sizes and VocationsPowertrains and Fuels Timeframe

Light Duty Medium & Heavy Duty

Compact Sedan Class 4 Delivery Spark-Ignition (gasoline) Internal Combustion Engine 2020

Midsize Sedan Class 6 Delivery Compression-Ignition (diesel) Internal Combustion Engine 2025

Small Sport Utility Vehicle Class 8 Bus Gasoline Hybrid Electric Vehicle 2030

Large Sport Utility Vehicle Class 8 Refuse Plug-in Hybrid Electric Vehicle 2035

Pickup Truck Class 8 Vocational Hydrogen Fuel Cell Electric Vehicle 2050

Class 8 Tractor – Day Cab Battery Electric Vehicle

Class 8 Tractor – Sleeper Cab

Approach/Strategy

Approach – Cost Components

7

We identified 8 key factors as most important cost components for quantifying TCO

Cost Components Major Gaps Addressed

Vehicle Depreciation; Retail markup

Financing Loan terms

Fuel Charging infrastructure

Insurance Annual & per-mile costs

Maintenance & repair Annual & per-mile costs

Tax & fees Registration; taxes

Payload changes Estimation of payload loss

Labor Cost of EV charging

Slide 9

Slide 10

Slides 11-12

Slide 13

Approach/Strategy

Technical Accomplishments and Progress

8

Publication of major technical report: “Comprehensive

Total Cost of Ownership Quantification for Vehicles with

Different Size Classes and Powertrains” https://www.osti.gov/biblio/1780970

Development of software tool for third parties to make

their own TCO calculations:

https://anl.app.box.com/s/pzc4dh2qgstomlrol9u66ncdi8fanvh5

Publication of literature review summarizing findings from

nearly 200 other studies:

https://escholarship.org/uc/item/8dq1b82q

Organization of two-part industry workshop on TCO from

manufacturer and fleet perspectives

Accomplishments

A. Burnham et al., 2021

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MY20 MY19 MY18 MY17 MY16 MY15 MY14 MY13

Ad

just

ed R

eten

tio

n R

ate

Model Year

BEV FCEV HEV ICEV PHEV

PowertrainSize Class

Car Light Truck

Technical Accomplishments – Vehicle Costs

9

Retained Value = MSRP × 𝐴𝑅𝑅𝑖,𝑙,𝑝

= MSRP × 𝑏𝑙,𝑝 × 𝑒𝑥𝑝 𝑘𝑙,𝑝 ∙ 𝑖

Retained Value = Retail Price × expሺ𝐴 ∙ 𝑎 +𝑀 ∙ 𝑠)

Depreciation for LDV as a function of

MSRP, vehicle age, powertrain, size class,

and market segment

Depreciation for MHDV as a function of

MSRP, vehicle age, and vehicle miles

traveled

Accomplishments

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Vehicle Age, Class 8 Sleeper Trucks

Sleeper, default VMT

Sleeper, high VMT

Sleeper, low VMT

Technical Accomplishments – Insurance

10

Gas Car = 0.0089x + 221.42

HEV Car = 0.0103x + 182.77

BEV Car = 0.0074x + 258.11

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$0 $20k $40k $60k $80k $100k

MSRP, Cars

Powertrain Correlation

Gasoline

HEV

BEV

Car = 0.0089x + 221.42

SUV = 0.0046x + 241.39

PUT = 0.0059x + 206.42

0

200

400

600

800

1000

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1400

$0 $20k $40k $60k $80k $100k

MSRP, Gasoline Vehicles

Size Class Correlation

Car

SUV

PUT

An

nu

al P

rem

ium

Comprehensive & Collision - $500 deductible

Quantified typical insurance rates for LDV,

including liability, comprehensive, and

collision as a function of MSRP, vehicle

size, powertrain, and residual value

Identified insurance rates for MHDV as a

function of vocation, and for tractors as a

function of MSRP and annual vehicle miles

traveled

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

Trac

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- Sl

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Del

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Del

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Ref

use

Typical annual insurance rates

Accomplishments

Technical Accomplishments – Maintenance and Repair

11

$0.101

$0.094 $0.090

$0.061

$0.000

$0.010

$0.020

$0.030

$0.040

$0.050

$0.060

$0.070

$0.080

$0.090

$0.100

$0.110

ICEV HEV PHEV BEV

Mai

nte

nan

ce C

ost

pe

r M

ile

Scheduled LDV Maintenance Costs

Transmission Service* Spark Plugs* Oxygen Sensor* Timing Belt* Fuel Filter* Engine Air Filter* Oil Filter* Cabin Air Filter Engine Coolant* EV Battery Coolant* Brake Fluid Engine Oil* Brake Rotors* Brake Calipers* Brake Pads* Shocks and Struts Tire Rotation Tires Replaced HVAC Service Headlight Bulbs Accessory Drive Belt* Wiper Blades Starter Battery Multi-Point Inspection

Compiled scheduled LDV maintenance for

ICEV, HEV, PHEV, and BEV

Quantified LDV repair costs as a function

of vehicle MSRP, vehicle size, and

powertrain throughout vehicle lifetime

Repair = ሺPowertrain & type multipliers)× ሺage factor) × ሺMSRP factor)

Powertrain ICEV HEV PHEV BEV FCEV

Vehicle

TypeMultipliers 1.00 0.91 0.86 0.67 0.67

Car 1.00 1.00 0.91 0.86 0.67 0.67

SUV 0.91 0.91 0.81 0.78 0.61 0.61

Pickup 0.70 0.70 0.62 0.60 0.47 0.47

Accomplishments

Technical Accomplishments – Maintenance and Repair

12

Compiled data on MHDV maintenance and

repair (M&R) costs by vocation for diesel

trucks

Compiled variations in MHDV M&R costs

from conventional diesel ICE trucks by

powertrain based on data from alternative

fuel buses

CasePowertrain

CNGV HEV PHEV BEV FCEV

Low 111% 96% 94% 79% 79%

Mid 100% 87% 84% 60% 60%

High 88% 73% 69% 41% 41%

Accomplishments

Quantified fraction of tractor-trailer trips

which are weight-limited in order to

estimate loss in payload for a given

increase in vehicle mass

A MY2025 BEV sleeper cab loses an

average of 2300 lbs of cargo capacity

relative to the ICEV (after accounting for

the one-ton weight allowance for BEV).

This increases costs by 4.9%.

However, in Autonomie low-tech case,

batteries have lower energy density

(kWh/kg). In this case, the expected

payload loss is 4400 lbs, for a 10.3%

increase in costs.

Technical Accomplishments – Payload

13

Stakeholders identified potential loss in payload as a significant concern for BEVs, though

anecdotal evidence suggests few truck trips are at gross vehicle weight rating (GVWR).

Autonomie modeled vehicle weight (2025)

ICEV BEV (low-tech) BEV (high-tech)

28,300 lb 35,400 lb 39,000 lb

Accomplishments

Technical Accomplishments – Levelized Costs

14

Calculation & comparison of Levelized Cost

of Driving (LCOD) across many perspectives

– Changes in costs throughout vehicle lifetime

– Comparison of lifetime costs for different

powertrains

– Comparison of lifetime costs for different

vehicle use cases

$0.00

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$0.20

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$0.40

$0.50

$0.60

ICE-SI ICE-CI HEV PHEV50 FCEV BEV300

Avg. 15-year per-Mile Cost of Driving - 2025, Small SUV

Vehicle Financing Fuel Insurance

Maintenance Repair Tax & fees

$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00

Tractor -Sleeper

Tractor -Day cab

Class 8Vocational

Class 6Delivery

Class 4Delivery

TransitBus

Class 8Refuse

Average 10-year per-Mile Cost of Driving - 2025, Diesel Trucks

Vehicle Financing Fuel Insurance

M&R Tax & fees Payload Labor

$0.00

$0.20

$0.40

$0.60

$0.80

$1.00

$1.20

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Per-Mile Cost of Ownership, ICE-SI, Small SUV, MY2025

Vehicle Financing Fuel Insurance

Maintenance Repair Tax & fees

Accomplishments

Responses to previous years reviewer comments

15

This is the first year that the project has been reviewed.

Reviewer Comments

Remaining Challenges and Barriers

16

Real-world data for alternative powertrains, particularly for MHDV, is very sparse

Not all vehicles are operated in the same way – variations in VMT and ownership time

Data-driven analysis using today’s costs is not necessarily going to hold true in future

Challenges and Barriers

Any proposed future work is subject to change based on funding levels.

Proposed Future Research

17

While this specific project is finished, there are several areas ripe for continued research

outside the bounds of this project:

– Applications of TCO analysis

– Regional resolution of costs

– Extension to other vehicle vocations & powertrains

The groundwork we have set in this project can be used by other researchers to improve

estimates of TCO / LCOD

Future Work

Any proposed future work is subject to change based on funding levels.

Collaboration and Coordination with other Institutions

18

Multi-lab research effort– Task leads from LBNL,

NREL, ORNL, and

Sandia, in addition to

Argonne

Collaboration / Coordination

TCO workshops for heavy-duty sector to vet methods and assumptions with industry– Vehicle manufacturer panel

– Fleet panel

One-on-one interviews with third parties to better understand main cost factors

Feedback from US DRIVE Integrated Systems Analysis Tech Team (ISATT)

Summary

19

Multi-lab research effort to identify and fill gaps

for holistic calculations of vehicle costs for LDV

and MHDV

– Previous VTO analyses generally focused just

on vehicle purchase cost and fuel expenditures

– Potential variations in rank-order of the cost of

technology from including maintenance, repair,

insurance, financing, and taxes & fees

Published major report documenting cost

estimates for each important component for

future analysis

– Report also includes quantification of TCO for

several scenarios and detailed sensitivity

analyses exploring magnitude of different

assumptions on TCO calculations

Summary