*4.2. Vehicle Cost Assumptions*

This study uses the default data in GCAM [26] only for the composition ratio of technology costs. For the assumption of the year of cost parity (ICEV versus BEV), previous studies are referred to. Lutsey and Nicholas [27] expect that 2025 is the earliest when BEVs will reach cost parity with ICEVs. This study points out that mass production of BEVs could lower their costs, especially because of their lower battery costs. Likewise, Soulopoulos et al. [28] expect substantial cost reductions in BEVs because of improvements in battery technology and economies of scale. In their study, the cost parity of ICEVs and BEVs will be realized around 2022–2026, depending on vehicle size and a BEV's range (for example, smaller cars will reach cost parity earlier). As shown in Figure 6, this study assumes that ICEV costs are constant over all periods, while BEV costs are assumed to reach cost parity with ICEV costs in 2025, as referred to in references [27–29]. Then, BEV costs will be 85% of ICEV costs from 2030.

**Figure 6.** Assumption of total costs (see Supplementary Materials).

We refer to Morrison et al.'s [30] research on cost competitiveness between BEVs and FCEVs for the assumption of the year of cost parity (BEV versus FCEV). In particular, it is found that a BEV with a 150-mile range will reach cost parity with a FCEV around 2025, and after 2025 a FCEV's costs will be lower than a BEV's costs (for more details and numerical values, please refer to the tables in the Supplementary Materials).
