PHEVs cost more to operate than gas cars?

Depending on when you charge your Plug-in Hybrid Electric Vehicle (PHEV) and the price of gas, it may be more economical to buy gas according to a soon-to-be-released study. Future PHEV owners might actually find it's more costly for them to plug in their cars, hurting adoption of PHEVs and discouraging PHEV owners from plugging them in. I came across this conclusion in a report (the link is to a PDF file) commissioned by the state of California. Here is exactly what it said.

"If PHEV owners bought electricity according to this tariff, they would not save money by charging at peak hours unless gasoline cost more than $3.73 per gallon. And they would want to charge their vehicles during off-peak hours as long as gasoline prices remained above $1.96 per gallon or they were using more than twice their baseline allowance and so paying more than $0.149/kWh. PG&E's experimental EV tariff would likely deter PHEV owners from charging during summer afternoon hours, but this effect depends upon the actual adoption of such a tariff by the vehicle owner, upon the specific peak hour rates, and upon the current prices of substitutable liquid fuels."

Go below the fold for more.

[Source: Low-Carbon Fuel Standard for California study]
First, lets be clear. The report states, "Under almost any scenario, plug-in hybrid electric vehicles (PHEVs) would be responsible for fewer greenhouse gases (GHGs) per mile driven when running in all-electric mode than when running in gasoline-fueled hybrid electric mode." I am talking about the economics of owning PHEVs. Not emissions. Operating costs matter, right?

Say what you like about current hybrids but regenerative breaking is free. You could argue you pay more upfront but there are real savings in gas after you buy and this is a real selling point. The system pays for itself even if it takes a large number of miles and years. This becomes more complicated with PHEVs and it could hobble adoption of such vehicles.

This is exactly how I came across the report. I was watching Your Green Report. It had an interview with the man behind the report that references the study. The final policy report was just released. I tracked down the official website. It was linked from this article. I noticed the technical report and started reading it. The references for the PHEV conclusions were studies by "Lemoine, D., D.M. Kammen, and A.E. Farrell" and "Lemoine, D., D. M. Kammen, et al." After the titles it said "forthcoming" and "under review." So I assume they are still under peer review.

So what do you think? Could this hurt PHEV's adoption or does this study have flaws?

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