Cost

Research shows that estimated preliminary costs for V2V implementation per vehicle will range from $341 to $350 in 2020, decreasing to $209 - $227 in 2058

NHTSA Researchers estimate costs for vehicle-to-vehicle deployment in the United States


08/01/2014
Nationwide


Summary Information

The preliminary cost and benefit estimates in the, National Highway Traffic Safety Administration (NHTSA) Vehicle-to-Vehicle Communications: Readiness of V2V Technology for Application study, are provided for three pre-determined technology implementation (e.g., aggressive to slow implementation) scenarios. These estimates provide a wide range of cost and benefits of a potential V2V implementation. The cost in this analysis comprises four categories: vehicle equipment, fuel economy impact, communications costs, and Security Credentials Management System (SCMS). Together, they estimate that the total cost per vehicle to the consumer for each vehicle will be approximately $341 to $350 in 2020 (across the 3 percent to 7 percent discount rates and three scenarios). This amount is projected to decrease over time to an approximate range of $209 to $227 by 2058. Of the four cost categories, the initial vehicle component cost is estimated separately for new vehicles and old vehicles. The component cost is $329 per new vehicle in 2020, and it will decline progressively to $186 to $199 in 2058. The fuel economy impact is estimated to be $9 to $18 per vehicle. The communications costs range from $3 to $13 per vehicle, with an average cost of $8.30 to $8.50. The component cost (i.e., aftermarket safety devices) per old vehicle range from $160 to $387. The SCMS costs range from $1 to $6 per vehicle with an average of $3.14. The SCMS cost will increase over time due to the need to support an increasing number of vehicles with the V2V technologies.

The total preliminary annual costs (the sum of the four categories of costs) of the V2V system fluctuates year after year but generally shows a declining trend. The estimated total annual costs range from $0.3 to $2.1 billion in 2020 with the specific costs being dependent upon the technology implementation scenarios and discount rates. The costs peak to $1.1 to $6.4 billion between 2022 and 2024, and then they gradually decrease to $1.1 to $4.6 billion.

Based on the agency’s preliminary assessment, the total annual costs of the V2V system will vary substantially from year to year. In addition to the on-board equipment (OBE) costs of a V2V system (i.e., the components that need to be installed on a vehicle to support the V2V safety applications operating in the system), there are also costs for fuel economy impacts, the SCMS, and communication between the SCMS and OBEs. These cost estimates are highly influenced by the technology implementation pace. Therefore, the agency used three different implementation scenarios (i.e., the rate at which new vehicles and aftermarket devices are purchased each year) to illustrate the potential total costs and the annual impact of establishing a V2V system. These three scenarios range from an aggressive implementation schedule that includes aftermarket devices and 100 percent implementation for new vehicles in three years, to a relatively slower implementation schedule that does not have aftermarket devices and with a maximum of 25 percent of full implementation. Across the three scenarios and two discount rates (3 percent and 7 percent), the estimated total costs rise from $0.3 to $2.1 billion in 2020 to a total of $1.1 to $6.4 billion in 2022, and gradually decrease to a relatively stable level of $1.1 to $4.6 billion.

Breaking down those annual cost estimates, NHTSA currently estimates, based on their preliminary information, that the on-board equipment necessary to support the V2V safety applications would cost $329 per vehicle in 2020, with the possibility that these costs will decrease over time as manufacturers gain experience producing this equipment (a phenomenon known as the “learning curve?). Given the various sales scenarios considered, they believe that the price per vehicle could be as low as $260 in 2022 and $186 in 2058.

In addition to the cost of purchasing/installing the V2V equipment, there are fuel economy costs due to the weight of the V2V equipment. The agency estimated that V2V equipment will increase each vehicle’s total weight by approximately 3.45 pounds. Consequently, it will increase fuel costs by between $9 and $12 for passenger cars over the lifetime of the vehicle, and $11 to $18 for light trucks.

The next cost category is the secure communications cost which is the cost of ensuring secure communications between vehicles and the SCMS and among the SCMS operations. For the first 3 years, based on assumptions about certificate issuance and delivery, no communications will occur to renew certificates. Further, due to the low overall V2V penetration rate among the operational vehicles, the agency believes that the probability of misbehavior is extremely low and thus the need for a secure communication is not critical. There are, therefore, no communication costs for the first three years. In year 4, the average per-vehicle cost to pay for communication is estimated to be $8.58 to $10.74, with the price potentially as low as $3.37. At its peak, the per-vehicle cost increases to $12.39 to $12.97, with an average fee that could be charged to vehicles sold from year 4 through the next 37 years ranging from $8.30 to $8.50.

The final cost is that of the SCMS itself, which will ensure that vehicles will be able to distinguish trustworthy message sources from those that are not, and, thereby, ensure that the V2V system operates most effectively. It is anticipated that the initial and ongoing cost of this SCMS can be covered with a one-time fee of $3.14 per new vehicle sold. In other words, supporting the functions of the SCMS would add an additional $3.14 to the cost of each vehicle sold.

In summary, supporting the functions of the SCMS and communications would add an estimated additional $11.44 to $12.64 to the average cost of each vehicle sold.

Table 1 Summary of Preliminary Costs per Vehicle
Cost category Amount in dollars
Vehicle Equipment Costs $329 in 2020, decreasing to $186 to $199 in 2058
Fuel Economy Impact $9 - $18
Security Credentials Costs $3.14
Communications Costs $8.30 - $8.50
Total Costs $341 to $350 in 2020, decreasing to $209 - $227 in 2058

This report, dated August 2014, includes many more details of connected vehicle system costs. These findings along with the costs provide a valuable resource for those considering the implementation of connected vehicle systems.


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Source

Vehicle-to-Vehicle Communications: Readiness of V2V Technology for Application

Author: Harding, John, et.al.

Published By: U.S. DOT National Highway Traffic Safety Administration

Source Date: 08/01/2014

Other Reference Number: Report No. DOT HS 812 014

URL: http://www.nhtsa.gov/staticfiles/rulemaking/pdf/V2V/Readiness-of-V2V-Technology-for-Application-812014.pdf

System Cost

V2V equipment costs - $341 to $350 in 2020, decreasing to $209 - $227 in 2058

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Related Unit Cost Subsystems

Vehicle On-Board (VS)

Keywords

NHTSA, SCMS, security credentials, fuel economy, communications, equipment, safety applications

Cost ID: 2014-00323