Plug-in hybrid electric vehicles (PHEVs) and electric vehicles (EVs) are expected to be widely implemented as private passenger vehicles, and they will be effective and practical to reduce CO
2 emission. However, a ratio between electric and gasoline drive of PHEV affects the fuel cost and CO
2 emission. In this study, we estimated the market penetration speed of PHEV/EV for next 40 years using probability distribution of daily mileage obtained from a questionnaire survey, and our new car selection model which considers the variation of car renewing period and fuel cost. The initial costs of PHEV/EVs are much affected by Li-ion battery cost which is assumed to follow a learning curve.
The simulation results show that gasoline hybrid vehicles (HV) have great share, and the wide spread of PHEV/EVs needs some subsidy policy. So we propose a carbon tax for gasoline which is used for the subsidy to PHEV/EVs. This subsidy is very effective to accelerate PHEV/EVs introduction and the reduction of CO
2 emission. The result shows this subsidy policy can reduce CO
2 emission from passenger vehicles to a half or one third by 2050, and can reduce long-term total cost of vehicle owners.
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