Today EVs are driven much less than other cars, which has big implications for the environment.
You know what else matters a lot? How much you drive. This gets very little attention, but has major implications for the environmental impact of EVs.
After all, it isn’t the manufacturing of EVs that gives them their environmental edge. If anything, the copper, aluminum, and lithium required to build batteries actually make EVs somewhat more resource intensive.
Instead, the prospect for EVs as a climate change solution hinges on their ability to reduce gasoline consumption. But how much gasoline is actually saved depends, crucially, on how many miles the EV is driven and on how many miles the driver would have otherwise driven in a gasoline vehicle.
How Much Are EVs Actually Driven?
Although this seems like a straightforward question, there is surprisingly little direct evidence. Last year in our blog, Jim Bushnell lamented that we know little about how much EVs are driven.
To shed light on this, I constructed the figure below using newly available nationally representative data from the 2017 National Household Travel Survey (NHTS). Prior to the 2017 NHTS, the most recent NHTS was conducted way back in 2009, when there were virtually no EVs on the road.
A valuable feature of the NHTS is that respondents fill out an “Odometer Mileage Record Form.” I took these odometer readings and divided by the age of each vehicle to calculate the average number of miles driven per year. The table below plots averages for four different types of vehicles.
Thus according to these data, EVs are driven significantly less than other types of vehicles. All-electric and plug-in hybrid vehicles are driven 6,300 and 7,800 miles annually, respectively, compared to 10,200 for gasoline and diesel vehicles, and 12,000 for conventional hybrids.
I find this pretty surprising. After all, the basic tradeoff with EVs is that they cost more to purchase than gasoline vehicles, but cost less to operate per mile. So EVs are an investment that pays off the more you drive, and consumer guides tend to recommend EVs to commuters and other people who drive a lot. I expected the opposite pattern, with EVs tending to be driven more than other vehicles.
What is Going on?
The most obvious explanation is limited range. The first generation Nissan Leaf, for example, has a range of less than 80 miles, making it impractical for roadtrips. This limited range impacts who buys EVs, and also impacts how they are used. For example, many households that own EVs have more than one vehicle, so they may just decide to leave the EV at home on high-mileage days.
It is not clear how much limited range should matter for plug-in hybrids. With a plug-in hybrid you always have the option to run on gasoline, so they are not subject to the same range limitations as all-electric vehicles. Still, many plug-in hybrid vehicle drivers purchased their vehicles with the intention to use them primarily powered by electricity, so this may still have a big impact on the type of driver who buys these vehicles.
Most other potential explanations are variations on the type of person who buys an EV. For example, it could be that urban vs rural can help explain the pattern. Urban households may be more likely to buy electric vehicles, perhaps because of stronger “green” preferences in urban areas, and may also tend to drive fewer miles per year. Previous research has shown that environmental ideology is a major determinant of what kind of vehicle people buy, so the mileage pattern may simply reflect the characteristics of the places where EV buyers tend to live.
Regardless of the explanation, this pattern has important implications for the environment. In particular, it suggests that so far EVs imply far smaller gasoline savings than previously believed.
For example, a recent study called “Are There Environmental Benefits from Driving Electric Vehicles?” by Energy Institute alumni Erin Mansur and coauthors, finds that the environmental benefits from replacing a gasoline vehicle with an EV in California are worth about $2,800. Reading the fine print, however, Mansur and coauthors make this calculation assuming that all vehicles are driven 15,000 miles per year. If, instead, each EV is avoiding only 7,500 miles per year driven in a gasoline vehicle, then the benefits are half as large, only $1,400.
I’m not trying to pick on Mansur and coauthors. Other analyses on the use of EVs also rely on what seem to be overly optimistic assumptions on miles driven. Another well-known model in this space is the “GREET” model”, which assumes that EV batteries are used for a lifetime of 160,000 miles. Moreover, federal CAFE standards use a lifetime for cars and trucks of 195,000 and 225,000 miles, respectively. All these measures seem high relative to the newly-available evidence from NHTS. For example, dividing 195,000 by 7,500 mile per year, implies an implausibly long average lifetime of 26 years.
The broader point is that mileage matters for EV policy. What we ultimately care about is reducing gasoline consumption, but current policies like the $7,500 federal tax credit treat low-mileage and high-mileage drivers uniformly. Is there some better policy that would target EVs to high-mileage drivers? Why, yes, there is. It is called a gasoline tax. Making gasoline more expensive would incentivize EVs for all drivers, but the biggest incentive would be for people who drive a lot of miles.
For more details see Lucas Davis, “How Much Are Electric Vehicles Driven?“, Applied Economics Letters, forthcoming.
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Lucas Davis is the Jeffrey A. Jacobs Distinguished Professor in Business and Technology at the Haas School of Business at the University of California, Berkeley. He is Faculty Director of the Energy Institute at Haas, a coeditor at the American Economic Journal: Economic Policy, and a Faculty Research Fellow at the National Bureau of Economic Research. He received a BA from Amherst College and a PhD in Economics from the University of Wisconsin. Prior to joining Haas in 2009, he was an assistant professor of Economics at the University of Michigan. His research focuses on energy and environmental markets, and in particular, on electricity and natural gas regulation, pricing in competitive and non-competitive markets, and the economic and business impacts of environmental policy.