How Much Are Electric Vehicles Driven?
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APPLIED ECONOMICS LETTERS 2019, VOL. 26, NO. 18, 1497–1502 https://doi.org/10.1080/13504851.2019.1582847 ARTICLE How much are electric vehicles driven? Lucas W. Davis Haas School of Business, University of California, Berkeley, CA, USA; Energy Institute at Haas, Berkeley, CA, USA; National Bureau of Economic Research ABSTRACT KEYWORDS The prospect for electric vehicles as a climate change solution hinges on their ability to reduce Electric vehicles; plug-in gasoline consumption. But this depends on how many miles electric vehicles are driven and on hybrids; vehicle miles how many miles would have otherwise been driven in gasoline-powered vehicles. Using newly- traveled; rebound effect available U.S. nationally representative data, this paper finds that electric vehicles are driven JEL CLASSIFICATION considerably fewer miles per year on average than gasoline-powered vehicles. The difference is D12; L62; Q41; Q54; Q55 highly statistically significant and holds for both all-electric and plug-in hybrid vehicles, for both single- and multiple-vehicle households, and both inside and outside California. The paper discusses potential explanations and policy implications. Overall, the evidence suggests that today’s electric vehicles imply smaller environmental benefits than previously believed. I. Introduction how many miles the driver would have otherwise driven in a gasoline vehicle. Many studies have pointed out that where in the This paper uses newly-available nationally repre- country you drive an electric vehicle has impor- sentative data from the U.S. Department of tant implications for the environment. This point Transportation’s National Household Travel has been made repeatedly – both in the economic Survey (NHTS) to provide some of the first evi- (Zivin, Kotchen, and Mansur 2014; Holland et al. dence on how much electric vehicles are driven. 2016) and engineering literatures (Tessum, Hill, Prior to the 2017 NHTS, the most recent NHTS and Marshall 2014; Tamayao et al. 2015). was conducted back in 2009, when there were Another important factor is how much you virtually no electric vehicles on the road, so this drive. This has received far less attention, but has represents one of the first opportunities to measure major implications for the environmental impact vehicle miles traveled (VMT) for electric vehicles. of electric vehicles. These data show that electric vehicles are driven After all, it isn’t the manufacturing of electric considerably less on average than gasoline- and die- vehicles that gives them their environmental edge. sel-powered vehicles. In the complete sample, electric If anything, the copper, aluminum, lithium, cobalt, vehicles are driven an average of 7,000 miles per year, and other materials used to build batteries actually compared to 10,200 for gasoline and diesel-powered make electric vehicles more resource intensive vehicles. The difference is highly statistically signifi- (Notter et al. 2010). Altogether, the negative extern- cant and holds for both all-electric and plug-in hybrid alities from manufacturing have been calculated to vehicles, for both single- and multiple-vehicle house- be $1,500+ higher for electric vehicles than for gaso- holds, and both inside and outside California. line-powered vehicles (Michalek et al. 2011). This pattern is surprising because electric vehi- Instead, the prospect for electric vehicles as cles tend to cost less to operate per mile, so should a climate change solution hinges on their ability be attractive to high-mileage drivers (Sivak and to reduce gasoline consumption. But how much Schoettle 2018). Instead, it appears that the exact gasoline is actually saved when a driver buys an opposite has happened, with low-mileage drivers electric vehicle? This depends, crucially, on how being more likely to buy electric vehicles. Limited many miles the electric vehicle is driven and on range, particularly for the first generation of CONTACT Lucas W. Davis [email protected] Haas School of Business, University of California, Berkeley, CA 94720, USA © 2019 Informa UK Limited, trading as Taylor & Francis Group 1498 L. W. DAVIS electric vehicles, has likely played a key role, so Thus the basic economics of electric vehicles implies this pattern may change over time as more long- the exact opposite of what is observed in Figure 1, range electric vehicles are introduced. with electric vehicles being driven more miles The evidence suggests that today’s electric vehi- per year than other vehicles. cles imply smaller environmental benefits than pre- The pattern in Figure 1 also goes against what viously believed. The less electric vehicles are would be implied by the ‘rebound effect’ (see, e.g. driven, the smaller the implied reductions in gaso- Borenstein 2015). Electric vehicles tend to cost less line consumption, and thus the smaller the implied to operate per mile (Sivak and Schoettle 2018), so reductions in carbon dioxide emissions. Current drivers should use them more.3 Thus the rebound policies like the U.S. federal $7,500 electric vehicle effect provides another reason why to expect, tax credit treat low- and high-mileage drivers uni- ceteris paribus, the exact opposite of what is formly, so don’t provide the right incentive to observed in Figure 1, with electric vehicles being induce adoption by high-mileage drivers. driven more than other vehicles. Figure 2 examines whether this pattern is dif- ferent for vehicles owned by California house- II. Preliminary evidence holds. About half of all U.S. electric vehicles are Figure 1 shows average miles driven per year for in California, so this breakdown is of significant four different categories of vehicles. This figure intrinsic interest. Moreover, electricity rates in was constructed using data from the 2017 California are higher-than-average (Borenstein National Household Travel Survey (U.S. and Bushnell 2018), so one might have expected Department of Transportation 2018). A valuable to see lower mileage for California electric vehi- feature of the NHTS is that respondents fill out an cles. As it turns out, however, the pattern is ‘Odometer Mileage Record Form’ which requires roughly similar for California- and non- them to write down the current odometer reading California electric vehicles. In both cases, these for all vehicles in the household. For this analysis, data show that all-electric and plug-in hybrid these odometer readings were divided by the age vehicles are driven considerably less than other of each vehicle to calculate the average number of types of vehicles. miles driven per year. Thus according to these data, electric vehicles III. Additional analyses are driven considerably less than other types of vehicles. All-electric and plug-in hybrid vehicles Table 2 compares average annual miles driven for are driven 6,300 and 7,800 miles annually, respec- electric- and non-electric vehicles. Across the tively, compared to 10,200 for gasoline and diesel entire sample, electric vehicles are driven an aver- vehicles, and 11,800 for conventional hybrids.1 age of 7,000 miles per year, compared to Table 1 provides descriptive statistics. 10,200 miles per year for gasoline and diesel vehi- This pattern is somewhat surprising. Purchasing cles. Thus, in the 2017 NHTS electric vehicles are any vehicle requires a buyer to make an intertem- driven 30% less than other vehicles. poral tradeoff between purchase price and operating This pattern holds for several different subsam- costs.2 Relative to gasoline-powered vehicles, electric ples. First, the pattern holds both for all-electric vehicles tend to cost more to purchase but less to and plug-in hybrid vehicles. Second, the pattern operate, so consumer guides recommend electric holds both for single-vehicle and multiple-vehicle vehicles for high-mileage drivers (McDonald 2016). households, suggesting that the pattern cannot be 1The overall average of about 10,000 miles driven per year is consistent with previous studies using data from the 2009 NHTS (see, e.g. Archsmith, Kendall, and Rapson 2015). Similarly, Levinson (forthcoming), shows using data from the 2009 NHTS that conventional hybrids tends to be driven more than gasoline- and diesel-powered vehicles, consistent with the two right-most bars in Figure 1. 2A related literature on gasoline-powered vehicles finds that vehicle buyers are relatively attentive to future operating costs (Busse, Knittel, and Zettelmeyer 2013; Allcott and Wozny 2014; Sallee, West, and Fan 2016). These studies are closely related to an older literature on a broader class of energy-related investments (Hausman 1979; Dubin and McFadden 1984). 3Early electric vehicle adopters were even able in some cases to charge their vehicles for free. During its early years, Tesla famously offered buyers unlimited free charging for life on its fast-charging network, though this practice was ended for buyers placing an order after 1 January 2017. See, e.g., Tim Higgins, ‘Tesla Motors Plans to Charge for Its Quick-Charge Access’ Wall Street Journal, 6 November 2016. APPLIED ECONOMICS LETTERS 1499 Average Miles Driven Per Year 12,000 9,000 6,000 3,000 0 All-Electric Plug-In Hybrid Gasoline/Diesel Conventional Hybrid Note: Constructed using data from the 2017 NHTS. Bars indicate 95% confidence intervals. All estimates calculated using sampling weights. Figure 1. How much are electric vehicles driven? Table 1. Miles driven per year, descriptive statistics. These differences cannot be explained by sam- Number of Standard pling variation. For each row the table reports the Observations Mean Deviation p-value from a test that the means in the two sub- All-Electric Vehicles 436 6,300 4,200 Plug-in Hybrids 426 7,800 4,900 samples are equal. In all cases the differences are Gasoline/Diesel 203,988 10,200 5,900 highly statistically significant. In the latest wave of Vehicles Conventional Hybrids 4,443 11,800 6,300 the NHTS there are 400+ all-electric and 400+ plug- Note: This table reports descriptive statistics for miles driven per year by in hybrid vehicles, so there are enough electric vehicle type in the 2017 National Household Travel Survey.