Costs and Benefits of Electric Vehicles

This paper undertakes a social cost-benefit analysis regarding an increase in the number of electric vehicles in the Swedish transport sector by year 2010. Battery cars are generally found to be socially unprofitable, even though their private life-cycle costs and external costs are lower than those of petrol cars. One important reason for this is that electric vehicles are heavily ʹsubsidisedʹ by having, in comparison with taxes on fossil fuel, a very low electricity tax. ʹHybridʹ cars are more likely to be socially profitable, especially for city-based delivery trucks, which may be both privately and socially profitable without subsidies.