BOX 4.2

Factors Affecting Deployment and Impact

PHEVs will not significantly reduce oil consumption and carbon emissions until there are tens of millions of them on the nation’s roads. Whether and when this might happen is highly uncertain, in part because the following factors are still uncertain at this time:

  • The rate at which the cost of batteries can be reduced,

  • Future cost and fuel economy of HEVs and advanced conventional vehicles,

  • Future costs and potential disruptions to the supply of oil,

  • Changes in government policies, in particular fuel economy standards, carbon restrictions, and subsidies for PHEVs,

  • The availability of a suitable place to charge the batteries and the potential additional cost of installing a new electric circuit,

  • Consumer acceptance of the additional cost of PHEVs relative to competing vehicles of comparable size and performance, especially HEVs, and their willingness to accept vehicles that must be plugged in virtually every day,

  • Resale value—some current HEVs have shown low depreciation rates, but if consumers are concerned that batteries will not last the life of the car, or that later owners, who are more likely to live in apartments, will not have access to a place to charge the vehicle, then they will be less likely to buy PHEVs, and

  • Large vehicle fleets may be appropriate for PHEVs if the costs are reasonable. Many such fleets, among them the massive federal fleet, are largely used locally for short distances, with the vehicles returning to a central location at night, prime conditions for PHEVs. In 2008 the federal fleet numbered about 645,000 vehicles, led by the Department of Defense (30 percent) and the U.S. Postal Service (34 percent). In fiscal 2008, federal agencies ordered over 70,000 vehicles, approximately 11 percent of the total federal fleet. About 80 percent of these were light-duty trucks and passenger vehicles.1

The impact PHEVs will have for any specific growth rate also is uncertain:

  • How many miles per year will actually be driven on battery power, given that many people do not drive significant distances every day and, even when they do drive, may not charge their vehicles every day, and

  • Carbon emissions per kilowatt-hour used varies widely across the country and with the time of day when it is generated, and projections for the future are even more varied.

Resolving such uncertainties was not possible in this study, but it will be important to consider them when planning for the future of PHEVs.


1DOE Office of Energy Efficiency and Renewable Energy, Transportation Energy Data Book, Edition 28. Available at

of PHEV (perhaps greater than the current federal tax credit of $7,500) to offset the additional costs of the vehicles; and taxes or restrictions on fuel, but these are beyond the scope of this study.4

This scenario uses the optimistic technology costs discussed in Chapter 2. If costs fail to decline to those levels, this scenario would be prohibitively expensive.

Probable Penetration

The Probable scenario represents a PHEV market penetration that the committee judges to be more likely in the absence of strong market-forcing policies to supplement the policies already in place. It also starts in 2010, but market penetration is slower than in the Maximum Practical scenario, reflecting factors described in Box 4.2. PHEVs rise to 3 percent of new light-duty vehicles entering the U.S. vehicle fleet by 2020 and to 15 percent by 2035.5 This pace would lead to 110 million PHEVs on the road by 2050, as shown in Figure 4.6.

The Probable scenario assumes the continuance of current policy incentives, which are inadequate to achieve the penetration rate in the Maximum Practical scenario. Vehicles


Alternatively, a sharp and prolonged rise in the price of petroleum could have the same motivational effect. However, the adverse consequences of such an event for the health of the economy could leave consumers without sufficient financial resources to purchase large numbers of PHEVs.


The committee based its estimate on estimates in the America’s Energy Future (AEF) Committee report, which drew on “historical case studies of comparable technology changes” (NAS-NAE-NRC, 2009, p. 165). The AEF study estimated that PHEVs would represent 1 to 3 percent in 2020 and 7 to 15 percent in 2035.

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