Renewable energy in transportation: economic and environmental trade-offs

Abstract

This paper explores the benefits and challenges of transitioning from fossil-fueled vehicles to electric vehicles in Iran, with a focus on economic and environmental analysis. To this end, three different scenarios were considered to evaluate the impacts of this transition: the baseline system (fossil-fueled vehicles only), electric vehicles powered by fossil-based electricity, and electric vehicles powered by renewable energy. Each scenario was analyzed using various criteria, including fuel and maintenance costs, greenhouse gas emissions, required infrastructure investments, and return on investment. The results reveal that in the baseline scenario, annual CO₂ emissions of 73.25 million tons and total annual costs of $1.92 billion are among the main challenges. In the second scenario, with a 50% penetration of electric vehicles powered by fossil-based electricity, CO₂ emissions are reduced by 36.76 million tons, and the return on investment is achieved within five years. In the third scenario, assuming renewable energy sources supply electricity and a 70% penetration of electric vehicles, CO₂ emissions are reduced by 114.49 million tons, and a return on investment of 32.6% is achieved. These findings underscore the importance of integrating electric vehicles with renewable energy to achieve economic and environmental sustainability. The study highlights the critical need for developing renewable energy infrastructure and implementing appropriate policies to accelerate the transition to electric vehicles.