Market penetration speed and effects on CO2 reduction of electric vehicles and plug-in hybrid electric vehicles in Japan

In order to reduce CO2 emissions in the passenger vehicle sector, mass introduction of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) is required despite their high battery costs. This paper forecasts the rate at which EV/PHEV will penetrate into the market in the future and the effects of that spread on CO2 reduction by using a learning curve for lithium-ion batteries, distribution of daily travel distance for each vehicle, and an optimal power generation planning model for charging vehicles. Taking into consideration each driverʹs economical viewpoint, the speed at which the EV/PHEV share of the new passenger vehicle market grows is fairly slow. The optimum calculation in our base case shows that the share of EV/PHEV is only a quarter even in 2050. However, the initial price and progress rate of batteries have a great effect on this share. Therefore, long-term economic support from the government and significant R&D innovation are required to reduce CO2 drastically through cutting down battery price. The results also show how much the CO2 emission intensity of power generation affects the CO2 reduction rate by introducing EV/PHEV.