Economic and Environmental Optimization of Vehicle Fleets Impact of Policy, Market, Utilization, and Technological Factors

vehicle models and sales have been growing steadily. It is now possible to buy several types of HEVs such as the Toyota Prius, Honda Civic, and Ford Escape. Even luxury brands such as Lexus and Porsche are working on sporty hybrid vehicles (2). As of October 2010, Mitsubishi launched the i-MiEV in Japan (April 2010) and several carmakers are about to release into the market new EV or PHEV models; for example, the Nissan EV Leaf (December 2010) and the Toyota PHEV Prius (2012) (3). An intermediate alternative between EVs and conventional vehicles is the Chevrolet Volt, which can be powered by an electric motor for 40 mi and has a battery that can be recharged by an internal combustion engine or at a charging station. Economic conditions are also changing rapidly. After the growth and expansion observed in the middle of the past decade, the economic crisis that started in late 2007 is limiting consumers’ disposable income and access to credit. At the fleet level, private companies and state agencies have been forced to adopt comprehensive planning approaches that seek to reduce operating costs, maintain customers’ service levels, and—when possible—continue sustainable practices or cap GHG emissions. Decision makers are faced with complex trade-offs involving economic, environmental, and policy impacts of fleet management decisions and regulations. This research aims to provide a better understanding of the monetary, emissions, and energy consumption trade-offs associated with distinct vehicle technologies (conventional fossil fuel, hybrid, and electric) using current real-world market and efficiency data. Specific contributions of this research include incorporating GHG costs into fleet vehicle replacement-type models, analyzing the competitiveness of current engine technologies in the United States, and evaluating the impacts of policies (tax credits, GHG taxes), usage (miles per year), and market conditions (fuel prices) on the competitiveness of EVs. This paper is organized as follows. The next section presents a literature review. The third section introduces the notation and formulation of the fleet management model used in the research. The fourth section describes the base case scenario and 15 alternative scenarios used to study the trade-offs among technologies, GHG costs, fiscal policies, and fuel prices. The fifth section describes data sources and model inputs. The sixth section highlights key results and the final section presents conclusions.