Study recommends better EPA labels on cost of traditional vs. hybrid, electric cars

Study recommends better EPA labels on cost of traditional vs. hybrid, electric cars

Redesigned Environmental Protection Agency fuel economy labels on cars for sale are likely ineffective in pointing out total savings of hybrid and electric plug-in cars over gasoline vehicles, according to new research involving two University of Kansas professors in the School of Public Affairs & Administration.

The researchers found that consumers for small to mid-sized cars would be more likely to choose a hybrid or plug-in electric vehicle if they know the total cost of ownership instead of simply looking at five-year fuel cost comparison.

"The information of total cost of ownership is not yet included on the EPA fuel economy labels but seems to trigger consumer interest in conventional hybrid and plug-in vehicles based on our analysis," said KU SPAA assistant professors Bradley Lane and Rachel Krause, as part of the new study. "We find that when total cost of ownership information is disclosed to respondents interested in small- to midsized cars, the likelihood of ranking a conventional hybrid, plug-in hybrid and battery electric vehicle more favorably increases and is statistically significant."

The findings were published in the journal Transportation Research Part A, and the study originated at the School of Public and Environmental Affairs at Indiana University and Indiana University-Purdue University, Indianapolis. Co-authors included IUPUI professors Jerome Dumortier and Saba Siddiki. The research team conducted a 2013 online survey of 3,200 respondents in 32 U.S. cities who were planning to buy a new car within two years.

Lane and Krause said the findings were crucial for research on energy-saving technologies in the United States because of the EPA's investment in redesign of the labels and because studies in Europe had found that detailing fuel cost was enough to steer consumers to hybrid and . However, they said in Europe because fuel prices in Europe are roughly double the U.S. average, consumers there are likely more sensitive to information about savings in fuel expenditures.

Also, U.S. hybrid and plug-in vehicle sales have slumped in recent years as they typically have a higher initial price than conventional gasoline vehicles.

The new survey found that when the labels added total cost information such as financing, depreciation, registration, maintenance and insurance costs, consumers in the market for small to midsize cars were more likely to choose a plug-in hybrid and battery electric vehicle.

"Upfront premiums in purchase price can be very hard to overcome. People have high personal discount rates, meaning that savings often need to be perceived as rather large and quickly accumulated to be considered 'worth' a more expensive upfront investment," Krause said. "In this study we find that showing savings from fuel-efficient vehicles compared with regular vehicles in terms of total cost of ownership increases the perception of their value – although, of course, their actual savings remains the same."

For example, a mid-sized gasoline vehicle had an annual of $1,845 compared with $1,272 for a hybrid. Still, that difference was not enough to sway consumers to choose a hybrid vehicle. When the researchers changed the EPA label to reveal the total monthly cost of ownership for a gasoline vehicle was $460 compared with $448 for a hybrid, it gave a boost to consumers' preference for vehicles.

Krause and Lane said the difference was even more significant for electric vehicles.

"The results indicate to me that, for all that people claim or attempt to make decisions about vehicle purchase based on rational factors like cost, fuel efficiency and safety," Lane said, "there are quite a few other emotional factors—like brand and body style—and use factors—like size and carrying capacity—that usually trump those others, even though it costs them thousands of dollars over the life of the time they have the vehicle."

Lane said for example, the study found that adding total cost of ownership to labels did not affect attitudes of potential buyers of small sport-utility vehicles even when shown a disparity in total cost.

However, Krause and Lane said they hoped results of the study could help bring more awareness to consumers about other options beyond gasoline-powered vehicles. The study could sway automakers and car dealers to consider including total cost of ownership in marketing brochures and ads, they said.

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More information: Jerome Dumortier, Saba Siddiki, Sanya Carley, Joshua Cisney, Rachel M. Krause, Bradley W. Lane, John A. Rupp, John D. Graham, "Effects of providing total cost of ownership information on consumers' intent to purchase a hybrid or plug-in electric vehicle," Transportation Research Part A: Policy and Practice, Volume 72, February 2015, Pages 71-86, ISSN 0965-8564,
Citation: Study recommends better EPA labels on cost of traditional vs. hybrid, electric cars (2015, February 17) retrieved 20 August 2019 from
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Feb 17, 2015
When they inform the purchaser of the total cost of ownership -- initial cost (including government subsidies?), operation and maintenance, including high priced parts such as replacement batteries -- the purchaser chose the electric/hybrid vehicle?

Feb 17, 2015
ICE cars have much more running costs than electric cars, including oil, filters, petrol (gas).
The only potential cost for the electric car owner is the battery, but it should last the lifetime of the car (depending on the Temperature where you live). Also there is practically zero wear on the internal components, electric cars really are the future.

Feb 17, 2015
including oil, filters

These really cost peanuts compared to replacing a $10-15k battery unit every 8-10 years.

but it should last the lifetime

It doesn't, unless you consider the lifetime of a car be comparable to the lifetime of the average consumer laptop. The current middle-age of cars on the road is around 10-11 years and lithium batteries simply do not last that long in use.

There's no battery technology suitable for electric vehicles that would last the 15-25 years expected out of the typical ICE car. The only contenders are old technology that trade longevity for poor efficiency and low capacity.

Also there is practically zero wear on the internal components, electric cars really are the future.

There's still the water pump, power steering, fans and brakes, joints, shocks, blowers, lights...

Feb 17, 2015
All batteries, Pb-H2SO4, LiPo and LiEs begin corroding on assembly, so their lifespan is limited to three to five years or 300 - 500 equivalent full charge/discharge cycles, which ever comes first. They obey the final law of thermodynamics, "You can't win."

There are better chemistries that those. 2000 cycles is not uncommon, but the shelf-life is still limited and they are not the fastest to recharge. NCA chemistries do better on recharging rate, but they're prone to bursting in flames.

To be "just as good" to a regular car, a traction battery should last 5000 cycles or 20 years. The state of the industry at the moment is about half way there.

Feb 17, 2015
as always the 800 pound gorilla is the battery technology.

lithium ion and lipo and other lithium chemistries are simply not up to the task of scaling to produciton of tens of millions of cars annually. not now not in ten years.

the next step for lipo is better anodes and cathodes. that is currently in the works for the coming ten years. that will take electric cars the next step forward.

the revolution however still lies in new chemistries and those aren't anywhere near close to fruition.

better anodes and cathodes will however revolutionize the battery useage in phones, power tools, and electric bicycles typically shouldering under a single kwh in net capacity.

Feb 17, 2015
The comments above show ignorance. A hybrid's battery isn't 10-15k. It's $800-2k depending on brand or if you get a refurbished battery. Also, you rarely or never need a brake job because the brakes are not typically engaged in the regenerative braking unless you are hitting the brakes hard such as in an emergency. You can save a lot of money with a hybrid but people that hate technology getting better don't want you to know that.

Diesel cars are dirty in Europe and don't pass US regulation. The VW's that pass have failures like the turbo in the Passat and are not ready for prime time.

Eventually every car will be all electric. Hybrids help us get there.

Feb 18, 2015
The beauty of electric cars is undeniable. Practically speaking, it's hard to see their advantages. Aside from zero emissions, it would appear they have none.

Batteries are expensive (note the surprisingly small difference in operating costs between gas and electric, per the article), and battery disposal is an ecological nightmare. In the US, the energy to charge the batteries mostly comes from fossil fuel sources (including coal), but it comes much less efficiently than at the pump due to losses in the generation and transmission of electricity. Not included in the EPA estimate will be the indirect cost of expanding the electrical grid to accommodate an electric fleet. There is also a small possibility that the electrical fields surrounding the regenerative braking assemblies and the huge battery bank could have health consequences. In the final analysis, it seems, electric cars are about feeling good, not actually doing good.

Feb 18, 2015
Practically speaking, it's hard to see their advantages.

The torque is amazing. For utility vehicles (and public transportation) that's very useful.

And speaking as someone who is living in a country that does have a noticeable winter period: A car with an instant electric heater is infintely preferrable to freezing for ten minutes until your combustion powered car deigns to shuffle some heat from the engine to the passenger compartment.

(and maybe we should include in the running cost all the taxes spent on subsidies for the oil industrie (hidden and overt) as well as the future additional taxes needed to mitigate/insure aginst/repair climate change damage)

Feb 22, 2015
I would like to see battery rental stations instead of gas stations.
Just throw your depleted battery in the charging dock and take a charged one.
If the battery is as expensive as that one guy said, I'd rather not even buy one with the car.

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