Domestic value added as an indicator for sustainability assessment: a case study on alternative drivetrains in the passenger car sector

To strengthen the economic pillar in sustainability assessment, the indicator ‘domestic value added’ is introduced. It aims at comparing established and less developed technologies regarding their prospective value added in a country. This is done by classifying a technology’s value added to the developed categories: domestic, potential domestic and non-domestic. Within this paper, two methods for assessing this indicator are introduced focussing on their applicability in a sustainability assessment context. Both methods are tested on a case study comparing two alternative drivetrain technologies for the passenger car sector (battery and fuel cell electric vehicle) to the conventionally used internal combustion engine. The first method is life cycle cost-based whereas the second is based on Input Output analysis. If a life cycle cost assessment is already available for the technology under assessment, the easier to implement life cycle cost-based approach is recommended, as the results are similar to the more complex Input Output-based approach. From the ‘domestic value added’ perspective, the battery electric vehicle is already more advantageous than the conventional internal combustion engine over the lifecycle. Fuel cell electric vehicles have the highest potential to increase their ‘domestic value added’ share in the future. This paper broadens the economic pillar in sustainability assessment by introducing a new indicator ‘domestic value added’ and giving practical information on how to prospectively assess it for existing and less developed technologies or innovations.

Graphical abstract