The vehicle operating costs module considers fuel costs, maintenance costs, and, for BEVs, battery shows the production cost of fossil fuels and electricity before taxes, subsidies, and markups in the 40 countries studied, based on the IMF-World Bank Climate Policy Assessment Tool (CPAT) (Black et al. 2023). As α more processed energy form, electricity typically costs more to produce than gasoline electricity production costs, however, vary significantly. Countries that rely heavily on hydropower tend to have relatively low electricity costs (e.g., Albania, Nepal, Ethiopia), while those that depend on imported oil for power generation face much higher costs. This difference has α significant impact distortions, sorted by the tax or subsidy on electricity, across the 40 countries. More than half (27) of the countries studied subsidize electricity to bring prices down. Most countries, by contrast, tax α small island country, subsidizes all three energy types. These fiscal wedges are added to the production cost of petrol, diesel, or electricity for the financial analysis. The economic analysis uses energy production costs, while the financial and TcO analyses use retail prices.
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