Demystifying Alternative Fuels 

As concerns about climate change continue to grow, the need for sustainable transportation solutions has become more apparent. Consumers are increasingly interested in adopting cleaner and more efficient vehicle propulsion systems. The study addresses this growing demand and aims to provide valuable insights to individuals, policymakers, and industry professionals seeking comprehensive information on sustainable transportation options.

Sustainability

Sustainability is the key driver, and a variety of propulsion systems are being considered. In terms of local emissions, battery electric vehicles (BEVs) and hydrogen vehicles outperform traditional internal combustion engines as they produce zero tailpipe emissions, leading to improved air quality. Synthetic fuels, however, have higher local emissions due to their production processes, but can be carbon neutral under certain circumstances. Additionally, BEVs have the highest rating in terms of efficiency, minimizing energy waste and reducing environmental impact. Both BEVs and hydrogen vehicles offer significant sustainability advantages over traditional engines, making them greener options for future mobility.

Vehicle Procurement Costs

Vehicle procurement costs play a crucial role in the adoption of sustainable propulsion systems. Currently, battery electric vehicles (BEVs) have higher initial acquisition costs than traditional combustion engines due to the expensive battery packs. However, the outlook is promising, as advancements in battery technology and increased production volumes are expected to decrease the cost of BEVs, making them more financially competitive with traditional engines. This narrowing cost gap, combined with potential future reductions in manufacturing costs, may make BEVs a more affordable and attractive option for consumers. As the market continues to evolve and economies of scale are realized, the potential for cost parity between BEVs and traditional engines is on the horizon, offering a compelling case for transitioning to sustainable propulsion systems.

Total Cost of Ownership

Total cost of ownership is a critical factor to consider when evaluating vehicle propulsion systems. In terms of fuel efficiency or consumption, battery electric vehicles (BEVs) stand out as they have extremely low fuel production costs due to their reliance on electricity, minimizing operating expenses compared to traditional internal combustion engines. Fuel cell electric vehicles (FCEVs) also offer lower fuel costs compared to hydrogen combustion engines and synthetic fuels. In addition, BEVs have lower maintenance costs due to lower demand for lubricants and simpler mechanics, resulting in reduced repair and servicing expenses. The combination of lower fuel costs and reduced maintenance requirements contributes to the overall cost-effectiveness of BEVs and FCEVs, making them financially attractive options from a total cost of ownership perspective. However, it is important to consider the potential for future cost reductions and advancements in maintenance techniques to further enhance the economic benefits of sustainable propulsion systems.

Realism of Implementation

Realism of implementation is a critical consideration when evaluating vehicle propulsion systems. One key aspect is the requirement for infrastructure development. Battery electric vehicles (BEVs) and hydrogen vehicles necessitate the development of both charging and refueling stations, which required significant investment. While BEVs could utilize existing electrical infrastructure, adequate charging infrastructure expansion is essential to meet future demands. Hydrogen refueling stations, on the other hand, need to be established from the ground up. Furthermore, the current levels of energy supply also come into play, while increased adoption of synthetic diesel / gas or other eFuels requires most of the current electricity production, switching the entire carpark to battery electric vehicles requires only an additional 27% higher energy production than today. If we convert the additional energy requirements into wind turbines and assess the current buildup (until 12/2023), we can see that the complete carpark transition to synthetic or eFuels seems to be an unreasonable waste of energy and consequently also of resources compared to switching to BEVs. 

Summary and Outlook

In summary, after analyzing sustainability, vehicle procurement costs, total cost of ownership, and realism of implementation, it is evident that battery electric vehicles (BEVs) emerge as the superior and most viable option for sustainable passenger vehicle propulsion. BEVs offer zero CO2 tailpipe emissions, higher overall energy efficiency, and lower operating costs compared to traditional combustion engines. While alternative fuels and synthetic fuels may serve as intermediary solutions for long-distance transport in specific applications like long-distance trucks, ships, and planes, their high production costs, lower efficiency, and environmental impact make them less viable for passenger cars. Therefore, the outlook points to BEVs as the primary choice for a greener and more sustainable future of passenger car mobility.

Download the full Deloitte study “Demystifying Alternative Fuels” here and receive further information.