Levelized Cost of Driving Assumptions

Levelized cost of driving (LCOD) should be interpreted as a simplified estimate that is an indication of the per-mile cost to purchase and operate because it does not include all real-world costs of purchasing and operating a vehicle, unlike more comprehensive total cost of ownership calculations. LCOD includes only specific key cost components for simplified comparisons of powertrain costs. The LCOD methodology is parallel to the levelized cost of energy (LCOE) methodology of amortizing capital costs in the electricity Annual Technology Baseline (ATB). 

The LCOD estimates are calculated using the following equations and definitions, with quantitative values shown in the following tables for light-duty and medium- and heavy-duty vehicles:

$$ \begin{aligned}
&\text{LCOD }\left[\dfrac{\$}{\text{mi}}\right]=A+B+C\\\\
&A: \text{Capital (Vehicle & Charger) Cost}\\
&B: \text{Fuel Cost}\\
&C: \text{Maintenance Cost}\\\\
&A=\dfrac{\text{vehicle_cost} + \text{charger_cost}}{\text{discounted_VMT}}\\\\
&B=\dfrac{\text{fuel_price}}{\text{TTWFE}} \\\\
&C=\dfrac{\sum\nolimits_i^t\left(\dfrac{\text{VMT}_i}{(1+\text{discount_rate})^i} \right)*\text{maintenance_cost}_i}{\text{discounted_VMT}}\\
\end{aligned} $$

where

• fuel_price is the price of fuel delivered to vehicles (constant over time for each selected ATB Fuel Pathway). In some electricity cases, such as residential or depot charging, the price is for energy drawn from the grid; in these cases, a corresponding fueling efficiency to account for efficiency loss incurred by the vehicle operator is applicable. In other electricity cases, such as public charging, the price is for energy delivered to the vehicle; therefore, no applicable fueling efficiency loss is incurred by the vehicle operator.
• TTWFE is Tank-To-Wheels Fuel Economy (includes an adjustment for charging losses when applicable).
• discounted_VMT is the present value of total vehicle miles traveled (VMT) over the vehicle lifetime, computed as \( \sum\nolimits_i^t\dfrac{\text{VMT}_i}{(1+\text{discount_rate})^i} \).
• \(i\) is the index for vehicle life year.
• \(t\) is vehicle lifetime.
• \(\text{VMT}_i\) is the VMT for each vehicle life year.
• \(\text{maintenance_cost}_i\) is the per-mile maintenance and repair costs for each vehicle life year.

Additional Notes

• Fuel economy for light-duty vehicles is in units of miles per gallon gasoline equivalent (mpgge), and fuel economy for medium- and heavy-duty vehicles is in units of miles per diesel gallon equivalent (mpdge).
• Fuel economies are computed from duty-cycle-weighted sums of fuel usage.
• Fuel costs for plug-in hybrid electric vehicles (PHEVs) are computed as a utility-factor-weighted sum of fuel usage and costs.
• Maintenance costs are first computed into net present value and then levelized because of their mileage dependence and escalating maintenance schedule (i.e., vary by year), whereas fuel prices for each ATB Fuel Pathway do not vary by year.

For light-duty vehicles:

• We use the mileage schedules estimated by the National Highway Traffic Safety Administration for annual VMT, as reported in NHTSA, 2020, Final Regulatory Impact Analysis (FRIA) of the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Year 2021–2026 Passenger Cars and Light Trucks. The annual VMT is discounted and summed based on the assumed discount rate to bring all costs to a present value (reflecting the costs associated with miles driven in the earlier years of vehicle ownership contribute more to the levelized cost than the cost of miles driven in later years). This methodology is used for consistency with other U.S. Department of Energy (DOE) analyses (Elgowainy et al., 2016).
  • For comparison consistency, VMT is assumed to follow the same schedule for all vehicle powertrains.
• The fuel price is converted to U.S. dollars per gallon gasoline equivalent.
  • The various fuel prices are detailed on the Fuels page. The selected fuel pathways for Baseline, Lowest Cost, and Lowest CO2e Emissions fuels are shown in the Transportation ATB charts.
• TTWFE is the tank-to-wheels fuel economy in mpgge. 
  • In the case of plug-in hybrid electric vehicles, separate fuel consumption metrics for charge-sustaining and charge-depleting modes are first combined with their respective fuel prices (typically conventional fuel for charge-sustaining and electricity for charge-depleting); those costs are then combined using utility factor assumptions, based on Islam et al. (Islam et al., 2023), and are consistent with (SAE J2841, 2010).
• Charging equipment and installation costs for battery electric vehicles and plug-in hybrid electric vehicles are factored into the price of electricity detailed on the electricity page.  

The following table summarizes the assumptions used for LCOD for light-duty vehicles.

Levelized Cost of Driving Assumptions for Light-Duty Vehicles

For medium- and heavy-duty vehicles:

• We use mileage schedules from (Burnham et al., 2021) based on data from VIUS. In this calculation, the annual VMT is then discounted based on the assumed discount rate to bring all costs to a present value (reflecting the costs associated with miles driven in the earlier years of vehicle ownership contribute more to the levelized cost than the cost of miles driven in later years). This methodology is used for consistency with other DOE analyses (Elgowainy et al., 2016).
• The fuel price is converted to U.S. dollars per diesel gallon equivalent.
  • The various fuel prices are detailed on the Fuels page. The selected fuel pathways for Baseline, Lowest Cost, and Lowest CO2e Emissions fuels are shown in the Transportation ATB charts.
• TTWFE is the tank-to-wheels fuel economy in miles per gallon diesel equivalent. 
  • In the case of plug-in hybrid electric vehicles, separate fuel consumption metrics for charge-sustaining and charge-depleting modes are first combined with their respective fuel prices (typically conventional fuel for charge-sustaining and electricity for charge-depleting); those costs are then combined using utility factor assumptions, based on TechScape (Argonne National Laboratory, 2024).
• Charging equipment and installation costs for battery electric vehicles and plug-in hybrid electric vehicles are factored into the price of electricity detailed on the electricity page.  

The following table summarizes the assumptions used for LCOD for medium- and heavy-duty vehicles.

Levelized Cost of Driving Assumptions for 

Medium- and Heavy-Duty Vehicles

References

The following references are specific to this page; for all references in this ATB, see References.