Cost‐effectiveness of plug‐in hybrid electric vehicle battery capacity and charging infrastructure investment for reducing US gasoline consumption

Federal electric vehicle (EV) policies in the United States currently include vehicle purchase subsidies linked to EV battery capacity and subsidies for installing charging stations. We assess the cost‐effectiveness of increased battery capacity vs. nondomestic charging infrastructure installation for plug‐in hybrid electric vehicles as alternate methods to reduce gasoline consumption for cars, trucks, and SUVs in the US. We find across a wide range of scenarios that the least‐cost solution is for more drivers to switch to low‐capacity plug‐in hybrid electric vehicles (short electric range with gasoline backup for long trips) or gasoline‐powered hybrid electric vehicles. If more gasoline savings are needed per vehicle, nondomestic charging infrastructure installation is substantially more expensive than increased battery capacity per gallon saved, and both approaches have higher costs than US oil premium estimates. Cost effectiveness of all subsidies are lower under a binding fuel economy standard. Comparison of results to the structure of current federal subsidies shows that policy is not aligned with fuel savings potential, and we discuss issues and alternatives.