| Abstract |
This interim report projects the cost effectiveness, from a consumer perspective, of four technology strategies capable of improving new personal vehicle fuel economy over the next decade: packages of individual gasoline vehicle technologies, advanced diesel engines, gasoline electric hybrids, and diesel electric hybrids. These economic projections are based on a future high-volume scenario where economies-of-scale for these technologies are similar to those for conventional vehicles today. They do not account for the higher manufacturer and consumer costs during a transition period. Based on EPAs review of the technical literature, all of these technology packages are projected to increase personal vehicle retail cost, ranging from around $1000 for a gasoline vehicle package in a midsize car to about $6000 for a diesel electric hybrid in a large SUV. But, by increasing vehicle fuel economy by 20% to 70%, these technologies will also reduce vehicle operating costs (primarily fuel expenditures). This report projects the consumer payback period, i.e., how many years it takes for a consumer to recoup in discounted operating savings an amount equal to the higher initial cost of the vehicle. Based on a set of common economic assumptions, these technologies are projected to pay back to consumers in 2 to 11 years. Since all of these technologies pay back in less than the projected 14-year life of a vehicle, they would all provide net savings over a typical vehicle lifetime. These discounted lifetime savings range from $300 for one of the midsize car scenarios to over $4000 for some of the large SUV scenarios. In all cases, the payback period is shorter and the lifetime savings are greater when the advanced technologies are used in a large SUV rather than in a midsize car. |
