Analysis of Regional Characteristics of Total Cost of Ownership in California, the UK, and Republic of Korea

Abstract

New powertrain technologies, such as those used in Hybrid Electric Vehicles, have a price premium which is often offset by lower running costs. Total Cost of Ownership (TCO) combines these purchase and operating expenses to identify the most economical vehicles overall. This is a valuable assessment for both private and fleet purchasers. To date, no studies have compared Total Cost of Ownership across more than two vehicle markets or analysed historic costs. To address this gap, this research provides a more extensive assessment of TCO in three industrialized countries — the U.S.A. (California specifically), the UK, and Republic of Korea — for the time period from 2015 ∼ 2019. As an early analysis of the regional characteristics of TCO, this study aims to examine how TCO varies across different geographic regions and develop an analysis methodology for future analysis of environmental vehicles. To analyze the TCO under identical conditions for each region, the TCO result is calculated using data from conventional vehicles by utilizing sufficient statistical data. The TCO model includes registration and road taxes as well as insurance, fuel, financial interest, depreciation, and maintenance costs. To represent the local features, the research considers four vehicles from different manufacturers. Using the proposed TCO model, the regional characteristic is analyzed and a sensitivity analysis is performed with the parameters constituting the TCO model. This research has implications for both fleet purchasers and private owners considering new vehicles. The findings are also relevant for carmakers aiming to develop vehicle sales strategies optimized for specific regions.