Valuing Plug-in Vehicle Air Emission and Oil Consumption Benefits Jeremy J. Michalek, Paulina Jaramillo, Mikhail Chester, Costa Samaras, C.-S. Norman Shiau and Lester B. Lave

2 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Conventional Hybrid- Electric Gasoline Electricity Power Convertor EngineMotor Engine & Motor Battery Pack - SmallLarge Vehicle electrification Battery Electric Engine & Motor Medium Plug-in Hybrid Electric CVHEV PHEV BEV

3 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Associate Professor Jeremy Michalek EPP and Mechanical Eng. Vehicle design and life cycle implications Assistant Professor Jay Whitacre EPP and Material Science and Eng. Battery technology Professor Chris Hendrickson Civil & Environmental Eng. Transportation and life cycle assessment Assistant Professor Shawn Litster Mechanical Eng. Fuel cells Professor Francis McMichael EPP and Civil & Environmental Eng. Battery technology, life cycle assessment Associate Professor Illah Nourbakhsh Robotics Institute Electric vehicle conversions Gregg Podnar Robotics Institute Electric vehicle conversions Dr. Constantine Samaras RAND Corporation (EPP Alum) Policy assessment Grace Heckmann Market demand for alternative vehicles Orkun Karabasoglu Life cycle implications of driving cycles Scott Peterson Life cycle air emissions, battery life, vehicle to grid Apurba Sakti Battery design and cost modeling Elizabeth Traut Plug-in vehicle design and charging infrastructure optimization Tugce Yuksel Battery degradation and thermal management

4 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Benefits of PHEVs 1.Greenhouse gas emissions  28% of GHG emissions from transportation (EPA) 2.Air pollution  22,000-52,000 deaths per year from air pollution (JAMA) 3.Oil dependency  Cost U.S. economy ~$0.5 trillion in 2008 (Greene)

5 CMU EPP Advisory Board Meeting | Jeremy J. Michalek How much can xEVs help? xEVs offset gasoline use  Reduces oil dependency xEVs change emissions profile  Fewer emissions associated with gasoline production and combustion  More emissions associated with battery and electricity production xEVs change location of emissions  Location doesn’t matter for GHGs, but…  Damage done by air pollution highly depends on where it is released (population density, etc.)

6 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Location drives air pollution damage

7 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Data Cohon et al NRC study “The Hidden Costs of Energy”  Quantify externality damages to human health, crops, buildings, etc.  $6M value of statistical life  Morbidity also accounted for Argonne National Labs (GREET)  Vehicle efficiency, emissions, and design  Life cycle emissions from refineries, factories, etc. National Household Travel Survey (NHTS)  Distribution of driving patterns in the U.S.

8 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Lifetime emissions damages Emissions damage reduction potential of plug-in vehicles  Optimistic: $1000 damage reduction over the life  Pessimistic: $6000 damage increase over the life

9 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Ownership costs Base Case Best Case for Electrification Worst Case for Electrification Vehicle costs ANL 2015 literature review DOE 2030 program goals** ANL 2015 literature review Gasoline prices Average ( ) Max ( ) Min ( ) Electricity prices Average ( ) Min ( ) Max ( ) Battery Life 12 years (life of vehicle) 12 years (life of vehicle) 6 years ** ANL calls DOE program goals “very optimistic”

10 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Net life cycle costs Optimistic: Plug-in vehicles slightly less expensive over the life. Costs drive comparison, not damages Pessimistic: Plug-in vehicles could cost much more while causing more damage

11 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Oil dependency Oil Supply Disruption  Externalities estimated at $0.11/gal (Brown and Huntington)  Not enough to change trends Market Power  US Monopsony effect: $0.22/gal (Leiby) Military spending:  $75-$90 billion in 2009 (RAND) : $0.24-$0.28/gal  But…  Spending is nonlinear: Marginal reductions may have near-zero effect on military spending  Less than half of each bbl oil produced is used to make gasoline – large reductions require coordination

12 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Cost of oil consumption Total Externalities + Monopsony Premium (Base Case)

13 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Other externalities Rebound effect  Lower operating costs may encourage more driving  Higher congestion costs  Higher accident rates  These externalities have higher associated costs than emissions (Delucchi)  Will range issues combat rebound effect?

14 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Take away Emissions damage reduction potential of plug-in vehicles  Upper bound: Hydro electricity  BEV reduces damages $1000 over HEV  Lower bound: Coal electricity  BEV increases damages $6000 over HEV Worth the cost?  Damage reductions are small compared to ownership costs  Across most scenarios, electrification is better only when it saves consumers money  If it’s cheaper, market will drive adoption  If it’s not, emissions benefits don’t justify the extra cost Oil dependency  Externalities, monopsony effect, and marginal security spending not enough to tip the balance Small is Beautiful  More batteries  more green  Large packs are underutilized  Extra emissions from production, weight  HEVs and PHEVs with small battery packs are most efficient and robust  Offer a good solution across a wide range of scenarios  Reduce more GHGs per dollar spent

15 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Decisionmakers Federal Decisionmakers  U.S. House and Senate  EPA  DOE  NHTSA State and Local Decisionmakers  California CEC and ARB  Other states interested in Evs Private Decisionmakers  Automotive manufacturers  Utilities

16 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Acknowledgements Co-authors  Prof. Chris Hendrickson (CMU) Civil & Environmental Engineering  Prof. H. Scott Matthews (CMU) Civil & Environmental Engineering Engineering & Public Policy  Prof. Jay Whitacre (CMU) Material Science & Engineering Engineering & Public Policy  Dr. Mikhail Chester (UC Berkeley) Civil & Environmental Engineering  Dr. Paulina Jamarillo (CMU) Engineering & Public Policy Tepper School of Business  Dr. Constantine Samaras (RAND)  Dr. Ching-Shin Norman Shiau (CMU/Dell) Mechanical Engineering  Scott Peterson (CMU) Engineering & Public Policy  Nikhil Kaushal (CMU) Mechanical Engineering  Richard Hauffe (Lockheed Martin) Carnegie Mellon  Green Design Institute  Vehicle Electrification Group  Design Decisions Lab Support  NSF CAREER Grant #  NSF MUSES Grant #  Ford Motor Company  Toyota Motor Corp  CMU Climate Decision Making Center, NSF SES Grant #  Teresa Heinz Scholars for Environmental Research Program  Steinbrenner Institute

Questions & Discussion

Backup Slides

19 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Breakdown of emissions damages

20 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Sensitivity Extensive sensitivity analysis on emissions and costs

21 CMU EPP Advisory Board Meeting | Jeremy J. Michalek Research direction 1.Regional Assessment: Where is better to electrify (grid mix, temperature, terrain, driving style, driving distance, etc.) 2.Battery Thermal Management: When worth paying the cost and energy to gain battery performance and life? 3.Infrastructure: Assess technical, economic and environmental implications of battery charging and swapping stations 4.Cell & System Design: Thin vs. thick electrode cells for different applications, combination on same bus? 5.Consumer Preferences: Willingness to pay for PHEV attributes 6.On Road: Hymotion Prius with sensors for road testing and validation, ChargeCar project, Toyota PHEV fleet