Nev Taxi Market- When Shared Mobility Meets Sustainable Development
With the rapid development of the automobile industry, the development of new energy vehicles (NEVs) has become a prime focus of auto manufacturers as energy crisis and environmental pollution have become prominent evils in social development. On the other hand, advancement in technologies such as energy, IoT (Internet of Things), and electronics and their deep integration with automobile manufacturing has further boosted the development of highly efficient and environmental-friendly new energy vehicles (NEVs). Although in the short and medium term, plug-in hybrid and hybrid electric vehicles are going to enjoy the growing market share of electric vehicles in the global automotive industry, the pure electric drive technology including battery and fuel cell will be the ideal technology in the long-term, providing direction for the future of new energy vehicles. NEVs (new energy vehicles) are vehicle which are partially or fully powered by electricity. New energy vehicles can be broadly classified into four categories: pure electric vehicles (battery electric vehicles), hybrid vehicles, fuel cell vehicles and solar electric vehicles. The below figure depicts the market size of global NEV taxi market for the year 2019 and 2025:
New Energy Vehicle (Nev) Taxi Market Size, Us$ Billion, 2019 and 2025
Source: Knowledge Sourcing Intelligence Analysis
Faced with increasingly serious energy and environmental problems, many developed as well as developing countries or regions have begun to seek industrial transformation by way of reducing the production of fuel vehicles with an agenda of new energy vehicles phasing out the conventional energy vehicles. For this, countries have implemented several policies and initiatives to ramp up the adoption of new energy vehicles. For instance, the United States encourages people to buy new energy vehicles through the establishment of supporting facilities such as charging stations, electricity fee reduction and the provision of driving and parking facilities for people owning NEVs. Germany, as the well-established powerhouse in the global automobile industry, has also announced that it will ban the sale of conventional internal combustion engine vehicles from 2030 or so. France has also plans to ban all sales of fuel cars by 2040 as a part of its agenda to achieve carbon balance by 2050 and become a carbon-neutral country.
However, the major driver of the global NEV taxi market is the implementation of policies and measures in China which has attached a great importance to the development of new energy vehicles (NEVs) as a national strategy. The country’s Ministry of Industry and Information Technology (MIIT) finalized the New Energy Vehicle (NEV) mandate policy on September 27, 2017. This policy is a modified version of California’s Zero Emission Vehicle (ZEV) mandate, aiming at the promotion of new energy vehicles (NEVs) while providing additional compliance flexibility to the existing fuel consumption regulation. This policy applies only to passenger cars and formally took effect on April 1, 2018. China has now become the largest market for new energy vehicles (NEVs), accounting for 50.40 per cent of the global NEV volume sold in 2017, followed by the United States with a share of 17.3 per cent, according to the statistics provided by the Internal Energy Agency and Huajin Securities Research Institute.
New Energy Vehicle (Nev) Sales Volume in China, in Million Units, 2011-2017
Source: Electric Vehicle (EV) sales and the China Passenger Car Association (CPCA)
One of China's major cities, Shenzhen reached an environmental milestone, with 99 per cent of the 21,689 taxi fleet being entirely electric-powered in 2018. These electric taxis are equipped with an on-board terminal which shows where taxis are in short supply, such as the airport, train station or any other location. It also clearly displays the fare as well as the route, which help prevent drivers from overcharging or taking a round-about route. According to the city’s transport committee, Shenzhen's 20,000-plus electric taxis are projected to reduce carbon emissions by about 850,000 tons a year. The high-tech hub southern China still had 7,500 gasoline-powered taxis on the road during the same year although electric ones far outnumbered them. The northern China city of Taiyuan was the only city in the country which had electric taxis since 2016. Shenzhen is one of the pilot cities promoting alternative and sustainable-energy public transport in order to reduce smog. While Beijing and other cities in China are served by massive fleet of electric scooters, bicycles and three-wheeled delivery vehicles that help reduce emissions, Shenzhen’s bus-fleet has been all-electric since 2017. The city also invested heavily on the expansion of network of about 20,000 public charging stations to support the use of NEV taxi fleet since the lack of charging station infrastructure is the major hurdle in the growing adoption of NEVs across different regions and countries.
With the rapid rise in the adoption of new energy vehicles, the development of various ancillary supporting facilities is still the key challenge to the NEV market. Infrastructure construction is a necessary prerequisite for the large-scale application of new energy vehicles across the globe. That is, further rise in sales of NEVs does require heavy investment in the charging station infrastructure for the large-scale operation of new energy vehicles (NEVs). This not only requires huge capital investment but also large areas of land within the heavily-congested urban structure which is another great challenge in itself, thus acting as a constraint for the NEV taxi market growth.
To sum up, with the global standards of vehicle emissions becoming more and more stringent, the development of new energy vehicles is also becoming more and more important around the world. However, many technologies still need to be incorporated and many practical factors that are still hindering the growth of NEV market still need to be tackled in order to realize the all-round adoption of NEVs in the near future.
ABOUT THE AUTHOR:
Anjali Joshi is a senior market research analyst at Knowledge Sourcing Intelligence. She oversees a team of analysts and is known for the quality of market intelligence she delivers to the clients which range from start-ups and Non-profit Organizations to Fortune 500 companies. Anjali’s keen understanding of international business and market dynamics, coupled with her years of experience working in this industry, allows her to analyse current and future trends across both global and clients’ target markets and help them in making informed decisions.
