Calculator Rationale and Methodology
Concerns about air quality, greenhouse gas emissions and petroleum dependence have led a growing number of governments, businesses and other institutions to purchase low-polluting, energy-efficient vehicles for their fleets. Hybrid-electric vehicles hold much promise for enabling fleets to increase fuel efficiency without sacrificing convenience or performance. Because of the newness of this technology, and the additional cost of the electric drive train, however, the purchase price of a hybrid-electric vehicle can be several thousand dollars more than its conventional counterpart. For this reason, it is important for institutions to better understand the full costs and benefits of hybrid vehicles to determine if such vehicles provide a good value and how best to integrate them into their fleets.
What the Calculator Will Do
The HEV Cost and Benefit Calculator Tool allows fleets to evaluate the full costs and benefits of a hybrid electric vehicle in comparison to a conventional vehicle. Fleets also may use the tool to determine the cost and benefits of a fleet of hybrid vehicles versus a fleet of conventional vehicles. The tool assesses both capital and operating costs, over the lifetime of use, as well as greenhouse gases and other air emissions. Outputs are provided per vehicle, per year, and per mile. Emissions benefits are not monetized.
Estimates of purchase price, repair and maintenance costs, and resale values were developed in consultation with Vincentric, a leading fleet management service provider. Purchase prices reflect estimated base factory invoice pricing. Baseline maintenance and repair cost estimates reflect projections from national fleet averages, and manufacturers’ recommended maintenance schedules. Baseline resale values reflect projected wholesale returns.
The tool projects repair and maintenance costs and resale values for the mileage and years of use specified by the user. Users may override the tool’s projections with actual data from their own fleets.
Since hybrid vehicles are new to the marketplace and the technology is changing rapidly, it can be difficult to accurately predict what resale values will be several years in the future. In addition, the presence of the hybrid-specific battery raises questions, since it is not known how many years beyond the current warranty (8 years or 100,000 miles for most hybrids) the battery will last and how the presence of a battery near or at the end of its warranty will affect resale value.
Like resale values, maintenance costs are much more difficult to estimate for hybrid electric vehicles because of their newness in the marketplace. Some anecdotal information exists to indicate that repair and maintenance costs for hybrids is similar to conventional vehicles, and in some cases, hybrid maintenance is actually lower. For example, brake pad replacement may be less frequent in hybrids than conventional models, as there is less wear due to the hybrid’s regenerative braking design. Some have estimated that the gasoline engine may also last longer due to less use. Honda, for example, estimates the transmission fluid change may be more frequent (30k miles versus 60k for conventional) in the hybrid Civic, but the spark plug change interval for the hybrid is less frequent. Battery replacement has not been factored in to the default figures due to the extended warranty (currently 8 years or 100,000 miles for most hybrids). Please see www.newdream.org/hev for more information on hybrid cost issues.
Emissions estimates are based on data developed by the American Council for an Energy-Efficient Economy for use in their publication, ACEEE’s Green Book®: The Environmental Guide to Cars and Trucks. While ACEEE’s methodology encompasses a broad range of emissions from the vehicle, fuel supply cycle, and manufacturing processes, the Hybrid-Electric Fleet Cost and Benefit Calculator Tool estimates in-use criteria emissions only. Detailed documentation on ACEEE’s rating methodology can be found in their report, “Rating the Environmental Impacts of Vehicles: ACEEE’s Green Book® Methodology”, available from ACEEE Publications.
Tailpipe emissions estimates in this tool reflect annual “real-world” in-use CO, HC, NOx, and PM10 emissions. Factors affecting these estimates are the vehicle’s certified emission standard, regulatory vehicle class, fuel type, and annual miles traveled.
CO2 estimates in this tool reflect in-use emissions only. Factors affecting these estimates are the vehicle’s city and highway fuel economy, fractional division of city and highway driving, and annual miles traveled. This tool assumes a conversion factor of 19 pounds of CO2 emitted per gallon of gasoline burned.
Miles per Gallon and Other Assumptions
To produce the gas usage, cost, air emissions and carbon dioxide results for the Calculator, we use combined EPA highway and city mileage figures, averaged with the standard 55% to 45% weighting preference given to city driving. However, the user may override this default by inputting the actual amount of city driving they anticipate doing. We realize the EPA fuel economy figures don’t always reflect real-world driving, but have chosen to use these ratings as they provide a consistent set of data for all vehicles – and are useful for making comparisons. The tool uses a default fuel price of $2.20 per gallon; however, due to the volatility of fuel prices, we encourage you to enter your fleet’s actual price for gasoline. We also encourage you to run several scenarios using varying fuel prices, based on your predictions, since fuel prices may go up or down in the future. The tool assumes a discount rate of 5 percent, to calculate the present value of savings experienced in the future. You may choose to change this factor to reflect the discount rate used by your agency or organization.
If you have any questions about the calculator, the methodology, or hybrid vehicles, in general, please contact the Responsible Purchasing Network at: 301-891-3683 or 1-877-683-7326.
The HEV Cost and Benefit Calculator Tool was developed by the Center for New American Dream, with assistance from the American Council for an Energy-Efficient Economy, under subcontract with the National Renewable Energy Laboratory. We thank Vincentric for their assistance in supplying data for the operations of the tool.
The following individuals provided peer review on the tool:
Melissa Howell, Executive Director, Kentucky Clean Fuels Coalition
Sean Reed, Alternate Fuel Vehicles Program Developer , City of Ann Arbor
Ellen Bourbon, Clean Cities Coordinator, New Jersey
Tammy Morgan, Clean Cities Coalition, Greater Baton Rouge
Kevin O’Connor, National Renewable Energy Laboratory
Josie Sharp, Bureau of Vehicle Management Director, State of Pennsylvania
Marcia Deegler, Environmental Purchasing Program Manager, Commonwealth of Massachusetts
Dwayne McKinney, Director of Fleets, State of Maine
Sarah Mallonga, Strategic Business Services, PHH Arval