Electric vehicles in Norway: a cost-benefit analysis

Abstract

This research looks at the socioeconomic effects between the procurement and use of an electric vehicle compared to a conventional vehicle under today´s policy measures. In order to get a sufficient comparison between electric and vehicles the cost-benefit analysis was chosen. The cost-benefit analysis was done in three separate scenarios, where each scenario included different variables. This was done in order to see which impact each of the variables had, and in turn evaluate the policy measures and results based on this.

With the assumption that an electric vehicle has a lifetime of 14 years and an annual driving distance of 13.000, the marginal socioeconomic net present value was estimated to be 262.956 NOK for choosing an electric vehicle instead of a conventional vehicle, given today´s policy measures throughout the lifetime. The estimated cost-benefit model showed that the difference in the marginal net benefit in the private costs of owning an electric vehicle compared to a conventional vehicle had a big impact on the results. The greater the difference was the more socioeconomic beneficial the electric vehicle became compared to the conventional vehicle.

For future policies it was recommended that policy measures toward road transportation should aim at making the use of vehicles a more costly choice compared to public transport, walking or cycling than they are today. At the same time make sure that the private costs of electric vehicles are significantly less than for the conventional vehicles.