# Transportation Deployment Casebook/2018/Plug-in Hybrid Electric Vehicles in the US
## Description of the Mode

Plug-in hybrid electric vehicles (PHEVs) has an electric motor and internal combustion engine which are powered by fuel. It is a kind of electric car that has a rechargeable battery installed in the vehicle such that the vehicle can be recharged from an external source of electricity and use the stored electricity in the battery to drive the vehicle. PHEVs can work in two modes, either all-electric by using the electric motor only or hybrid where both the electric motor and combustion engine are used. The batteries used for PHEVs are typically smaller than the other types of electric car as electricity is not the only energy source used in driving the car. In a sense it is more reliable, if the battery is running out, the gasoline engine can be used as a backup to drive the car. Also the combustion engine allows the vehicle to drive for a more extended range. When the car is running in their battery mode, there is no tailpipe pollution produced. Since the majority of the energy used to drive the car is electricity which is considered as clean energy, PHEVs are classified as a clean and affordable transportation option for travelling a long distance and reducing carbon emissions.The benefits of having an electric engine and battery can be:
* Reducing the amount of petroleum used, since the vehicle will mainly operate by the electric motor and the gas-powered engine is used only, the amount of petrol used for the gas-powered engine will be significantly reduced. Also, the fuel cost can be substantially reduced as the cost of electricity is much lower than that of fuel.
* Reducing the emissions of greenhouse gases, although there are GHGs produced in the process of generating electricity (depends on the method of generation), the PEVs itself would not create greenhouse gases during operation.
* Encouraging sustainability for the future, electricity is considered as a cleaner energy source, comparing to petroleum and therefore it is a more sustainable travel mode.
* Driving for a longer range and having a higher speed, comparing to the battery electric vehicles (BEVs) as the gas-powered
The current main market would be for the consumers who pay more attention to the rising environmental concerns. There aren’t many models of PHEVs on the market yet, this is because for those who interested in the environmental benefits of electric vehicles will tend to go for the all-electric vehicle not the one combined with the hybrid.

## History of the Mode

The first electric vehicle with a non-rechargeable battery was introduced in the 1830s by Robert Anderson. The interests on electric cars grew in the following years after his invention. In 1859, Gaston Plante invented the first lead-acid battery which eventually became a rechargeable battery, initiating the design of the first electric automobile in the later years. At the beginning of the twentieth century, the market share of electric vehicles grew to 28% of the total market in the United States. The main reason for the rapid growth of EVs sales volume at that time was that the electric car could provide a more comfortable driving experience compared to gas-powered vehicles which caused noises and vibration. The popularity of EVs started to decline in the 1920s due to the high cost of manufacturing compared to gas-powered cars. For the gas-powered vehicles, the elimination of hand crank and the development of road facilities enabled longer distance travelling, which electric vehicle could not achieve. In the late 1960s, environmental awareness was raised and therefore promoting more attention to the market of electric vehicles. The interests of EVs was halted and sparked during the 1980s - 1990s and was again attractive in 2010 when the fuel prices increased significantly and Tesla Motors' announcement of the production of luxury electric cars.
Although the history of the development of an electric car lasts more than a century, the significant commercial development of PHEVs came in in 2002. There are several factors lead to this such as the technology development of battery and power management, the increasing fuel prices and the increasing environmental concerns. There weren't many purchases between 2002 and 2010, less than 1000 purchases were made during these years and only one model of PHEV was available. It was until 2010, the first commercially available PHEV in the US was released by Volt. For the subsequent years, manufacturer company started to design more models as PHEV and release it to the US market. Today, there are more model choices for the consumers and the cost of buying a PHEV has become more affordable.

## Early Market Development

Initially, back to 2002, there were not yet many electric vehicles and PHEV was not yet had any commercial development.
In the current electric vehicles market, there are currently four groups of electric vehicles, depending on their design powertrain, namely battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), Hybrid electric vehicles (HEVs), and fuel-cell electric vehicles (FCEVs).
BEVs, also known as all-electric or fully electric vehicles, is powered by an electric motor only, making BEVs has the largest battery back. Although there is some pollution generated during the electricity generation process, it does not have tailpipe emissions when driving and therefore, it is also known as zero-emission vehicles and environmental people more favour it. Its shortages are lower driving range and speed since it is powered by the electric motor only. Unlike PHEVs, there is no alternative engine in the car and if the battery is emptied, the only solution is to recharge the car.
FCEVs have an electric motor and battery, it is powered by converting hydrogen gas into electricity. Fuel-cell vehicles are only beginning to appear for purchase, but offer significant promise as low-carbon clean technology.
HEVs are mainly powered by a gasoline engine and a battery is installed to enhance the fuel efficiency of the vehicle. They use conventional fuel sources such as gasoline and cannot be recharged as PHEVs. The sales number of HEVs was first high but now the sales volume is decreasing due to the growing fuel prices.

## Role of Policy

Policy support is playing a significant role in helping the development and deployment of PHEVs in the U.S. The Energy Department in the US has invested more than $115 million to construct more than 18000 charging infrastructures across the country. The Department also supports new battery technology, for instance, the development of the lithium-ion battery technology used in Volt was helped by the research conducted by the Department of Energy. In addition, the Department’s investment in battery research and development has helped to cut the costs of developing an electric vehicle battery by 50% in the last four years.

## Growth of the Mode

There are various methods used by the government to promote the sales of electric cars such as rebates, tax exemptions and tax credits. Over half of the states in the United States use one or more of these methods. For example, California offers rebates to light-duty zero emission vehicles and plug-in hybrid electric vehicles. The US government has introduced a tax credit for PEVs (as mentioned before, PHEVs is a kind of PEV) purchased after 2009, which ranges from $2500 to $7500 based on the different models of PEVs. The tax credits will apply to a manufacturer who sells more than 200000 EVs (there are four types of EVs in the market).
Also, there are certain specifications have been made to standardize the plug-in electric vehicles in the market such as carbon dioxide emission measure, the allowable driving distance, the minimum speed of the vehicle and detailed specifications of the battery used installed in the vehicle.

## Development of the Mode

The major factors that affected the development of electric vehicles in the twentieth century were the fuel price and development on the gas-powered vehicles. The concept of electric vehicles came in again when the fuel prices were high and the environmental issues raised with the gas-powered vehicles.
Several constraints affect the market penetration of the PHEVs, such as actual performances of PHEV as against to expectations, future gasoline prices, number of PHEV charging facilities, PHEV model availability, PHEV battery technology and costs etc. A survey proposed by Krupa stated the importance of tax incentives and manufacturer rebates for promoting the sales of PHEVs. It is suggested that by promoting the savings on fuel prices and other operating costs, PHEVs can become more attractive to customers.
The primary focus on developing this mode will be improving the battery technologies, reducing the cost of manufacturing and building more charging infrastructures. Improving the batteries include improving the battery capacity and hence their driving range and speed can be improved. Reducing the manufacturing cost will help in reducing the prices of PHEVs, allowing it become more affordable to consumers. Building more charging infrastructures will improve the convenience of using PHEVs and therefore attracting more sales. To overcome these constraints, the government and the private company should work together closely to reduce the costs and build more infrastructure to ease the charging of the cars.
Although there are obstacles to the development of the electric vehicle market, there is still a huge potential market for PHEVs. Since electric vehicles can significantly reduce the use of gasoline and therefore reduce the emission of greenhouse gases, it can be considered as a sustainable transport vehicle. According to a report by IEA, the total electric cars market share was 0.01% in 2005 but in 2016, the market share was 0.91%, there was a significant increase. Although the market share is not really high at the moment, it can be said that the potential of PHEVs dominant the market is really high.

## Quantitative Analysis

The quantitative analysis of the life cycle of the plug-in hybrid electric vehicle was performed using the sales volume data between 2011 and 2016 obtained from the U.S. Department of Energy. There are limits with the data as the PHEV is entirely new for commercial uses and only six years data was collected. To better perform the analysis, a cumulative analysis was used to visualise the life cycle of the technology better. The sales number of vehicles can indicate the number of use of the mode.

## Raw Data

| Year | Number of Vehicles Sold |
| 2011 | 7981 |
| 2012 | 38586 |
| 2013 | 49008 |
| 2014 | 55357 |
| 2015 | 42943 |
| 2016 | 93461 |

## Methodology

S(t) = K/[1+exp(-b(t-t0))
Where:
* S(t) is the sales volume
* t is the time in years
* t0 is the inflection time in year
* K is saturation status level (estimated)
* b is a coefficient (estimated)

### Estimation of K

The estimation of K can be done by looking at the largest number of vehicle sold then estimate a K and increase the K each time for an increment. Compute the regression using the estimated K until the highest r square is achieved. The K estimated in this analysis was 43000, where the line best fits.

## Regression Analysis

As shown above, the details of regression analysis were listed. It can be seen that although the K estimated has the greatest p-value of 0.882683, the actual curve and the predicted curve is not perfectly matched. This may due to uncertainties in the social, political, economic and environmental impact on the development and deployment of the technology, which did not account for this model.

## S Curve

The life cycle of the technology:
* Birth phase: 2002-2010
* Growth phase: 2011-2018
* Mature phase: present
As PHEV only exists in the market for less than one decade, the data can be obtained limited. To better analyse and present the data, a cumulative analysis was used to get a smoother graph for investigating. Note that in 2015, the number of vehicles sold was dropped but using a cumulative analysis can best mitigate this outlier. According to the S curve, it can be seen that the birth stage is before 2010, in which PHEV was first introduced to the market but was not popular as an option of travel mode. The growth phase of the life cycle of PHEV was between 2011 to 2018. The sales volume of PHEVs begins to increase each year. Finally it reaches the top, where represents the mature stage, the number of vehicles sold will gradually become similar and there will not be a significant increase. The life cycle obtained in this model somehow did not match the reality as the mature stage comes too early which did not obey the potential market of PHEVs as economists predicted before. Therefore, it can say that this modelling is not accurate enough to identify the life cycle of PHEVs, more data and larger K (say use the total vehicle's sales in the US) should be used to gain a better result.

## Reference

* ↑ , Udvardy, S., Union of Concerned Scientists, 'How Do Plug-in Hybrid Electric Cars Work?'.
* 1 2 ,Bayram, I., Tajer, A., 2017, ‘Plug-in Electric Vehicle Grid Integration’, Artech House, U.S. .
* ↑ ,International Energy Agency, 'Plug-in Hybrid Electric Vehicle'.
* ↑ ,DeMuro, D. 'Should You Buy an Electric Vehicle or a Plug-in Hybrid?', April 2014.
* 1 2 ,Department of Energy, 'The History of the Electric Car', September 15 2014.
* ↑ , MJB&A, 'Electric Vehicle Cost-Benefit Analysis',December 2016.
* ↑ , Environmental and Energy Study Institute, 'Comparing U.S. and Chinese Electric Vehicle Policies, February 28,2018.
* ↑ , Krupa. J, Warrender, C. 'Analysis of a consumer survey on plug-in hybrid electric vehicles', 2014
* ↑ , IEA, Clean Energy Ministerial, Electric Vehicles Initiative, 'Global EV Outlook 2017', 2017.
* ↑ https://www.afdc.energy.gov/data/10567