Abstract:

This working paper assesses the timing of cost-effectively electrifying shared mobility fleets in U.S. cities, with a focus on ride-hailing. The authors develop a total cost of operation metric for conventional, hybrid, and electric vehicles in eight U.S. cities. They incorporate regional variation in incentives, taxes, and energy costs and apply vehicle technology improvements to assess the changing purchase and operating costs through 2025. Within the analysis, they also assess the importance of driver access to home charging on electric vehicle operating costs. The authors track the shift in per-mile operating costs and the associated payback period for electric vehicles relative to conventional and hybrid vehicles under a variety of use cases. Based on the analysis the authors offer four main conclusions: (1) Based on underlying economics, ride-hailing vehicles are ripe for electrification. (2) Even without purchasing incentives, BEVs will become the most economically attractive technology for ride-hailing operations in the 2023–2025 time frame.  (3) Access to affordable charging will be critical to unlocking the economic benefits of electric ride-hailing. (4) Electrification of ride-hailing fleets is not likely to occur naturally, so new policy and company efforts will be key.