In this paper, we adopted a simple yet useful capacity fade model of a Li-ion battery for a hybrid electric vehicle application. Its simple structure permitted us to embed it in the formulation of the optimal energy management control problem, which we solved using dynamic programming. In this way, we were able to study the trade-off between globally optimal fuel economy and battery life. This trade-off was quantified in terms of total cost of fuel and battery projected to the entire vehicle life. Furthermore, a sensitivity analysis was performed to investigate the influence of time-varying fuel and battery prices on total cost of ownership.

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