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Arthur D. Little: “The True Economic and Environmental Costs of Battery Electric Vehicles in the United States – a 2015 Review and 2025 Forecast”

Boston, November 29, 2016

A new study of the real impact of battery electric vehicles (BEVs) compared to internal combustion engine vehicles (ICEVs), in terms of both total cost of ownership (net of public subsidies) and environmental impact, reveals no easy choice for eco-minded consumers. Do BEVs truly offer an environmental advantage – and if so, at what cost?

The study, by Arthur D. Little (ADL), analyzes the
impact of new BEVs and ICEVs in the US, and projects the economic and environmental effects over the assumed 20-year lifetime of a US passenger vehicle.

ADL’s comprehensive research looked at BEVs and ICEVs manufactured in 2015 and 2025, considering both greenhouse gas emissions and the secondary environmental impact of vehicle production. While the total cost of ownership for BEVs is forecast to decrease significantly by 2025, the magnitude of this decline is not sufficient enough for BEVs to gain a cost advantage relative to ICEVs. 

The environmental impact is more complex, as ADL’s study found that a BEV purchased in 2015 will produce 23% less greenhouse gas emissions than a similar ICEV, but the lifecycle of a 2015 BEV will generate approximately three times as much human toxicity. Combined with the financial burden BEVs place on the consumer, the complex environmental reality of BEVs will continue to present challenges for the sustainability-minded consumer in choosing whether to drive a BEV or an ICEV.

Commenting on the findings, John Brennan, Managing Director, Arthur D. Little US, said, “While the promise of BEVs has excited consumers and regulators alike, the fact remains that the R&D, production, in-use, and end-of-life of BEVs and their Li-ion batteries have their own set of economic and environmental challenges, in terms of both overall cost of ownership and human-health impact. Our study is a must-read for any transportation policy-maker and sustainability-minded consumer looking to understand the realities of the mainstream acceptance and use of BEVs in America’s transportation fleet.”

Tim Barder, Manager, Arthur D. Little US, stated: “Our study is unique in that the analysis is conducted from OEM, consumer and market-based perspectives enabling a true ‘apples-to-apples’ comparison between BEVs and ICEVs, including alternative transportation and battery-pack replacement for BEV owners, which are often overlooked.”


To download the full report, visit


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About Arthur D. Little

Arthur D. Little has been at the forefront of innovation since 1886. We are an acknowledged thought leader in linking strategy, innovation and transformation in technology-intensive and converging industries. We navigate our clients through changing business ecosystems to uncover new growth opportunities. We enable our clients to build innovation capabilities and transform their organization.

Our consultants have strong practical industry experience combined with excellent knowledge of key trends and dynamics. Arthur D. Little is present in the most important business centers around the world. We are proud to serve most of the Fortune 1000 companies, in addition to other leading firms and public sector organizations.