Energy prices and policy incentives as determinants of electric vehicle adoption: A total cost of ownership analysis

This paper analyzes the total cost of ownership of electric vehicles compared to internal combustion engine vehicles in Hungary across three market segments: affordable, mid-range, and premium. The study incorporates purchase price, operating costs, maintenance, insurance, and government incentives over five- and twenty-year horizons. Sensitivity analysis demonstrates that energy price fluctuations significantly influence on total cost of ownership, particularly in premium segments and under rising fuel prices. While electric vehicles exhibit potential economic competitiveness, their viability remains highly dependent on regulatory frameworks and technological progress. These findings underscore the critical role of supportive policies and infrastructure development in accelerating sustainable mobility. Limitations include the exclusion of residual value and external environmental costs, suggesting directions for future research on life-cycle assessments and broader vehicle categories. [source: prepared with the support of Aria AI] • Provides a comparative analysis of Total Cost of Ownership (TCO) for electric and internal combustion vehicles in Hungary. • Evaluates three market segments (affordable, mid-range, premium) over 5-year and 20-year horizons. • Incorporates sensitivity analysis on energy price fluctuations and battery replacement costs. • Demonstrates the critical role of policy incentives and infrastructure in EV economic competitiveness.