NEV Taxi Market

NEV Taxi Market: Overview

• The global NEV taxi market was valued over US$ 2.1 Bn in 2020. It is estimated to expand at a CAGR of 26.64% from 2021 to 2031. Expansion of the global NEV taxi market can be attributed to rising concerns about vehicle emissions and their ill effects on the environment. Awareness about depletion of fossil fuels, their rising prices, and emissions caused by the combustion of these fuels are boosting the demand for new energy vehicles (NEV).
• Global automakers are reportedly launching newer battery electric vehicles and hybrid electric vehicle models. Ongoing technological advancements are at the core of this emergence of new vehicles. Availability of a variety of models in the market caters to varied demands for more number of people, thus increasing the adoption of NEV taxis.

Drivers of NEV Taxi Market

• Rapid increase in air pollution levels, which are harmful for the environment and human health, has prompted global and state governing bodies to design and develop environment-friendly technologies and vehicles. This has led to rapid development and implementation of electric vehicles for both personal and commercial operations, as they are considered the best possible alternative for the environment. Studies and surveys on road transportation indicate that road transportation pollution has started to decrease in those regions where the rate of adoption of NEVs has been high. This is a major factor that is anticipated to propel the NEV taxi market during the forecast period. NEV taxis enable taxi operators to reduce costs associated with maintenance and operations of the fleet of vehicles, which generate more revenue. These factors increase and influence both taxi owner-drivers and passengers to opt for NEV taxis or cabs, thereby boosting the NEV taxi market growth across the globe.
• Stringent emission regulations coupled with tax incentives and subsidies on purchase of NEVs are driving the market across the globe. Moreover, a surge in awareness about adoption of green mobility, which is considered as the future of mobility or tomorrow’s mobility, owing to limited availability of fossil fuel and decrease in dependency on these fuels by auto manufacturers, is also projected to drive the NEV taxi market during the forecast period.
• Incentives offered by government authorities are major drivers for electrification of transportation systems. Several states also offer non-cash incentives for electric vehicles, such as Carpool lane access in California and free municipal parking. In a similar instance, India in its financial budget of 2020 announced reduction of Goods and Services Tax (GST) on electric vehicles from 12% to 5%. These monetary benefits are attracting more number of people to opt for electric vehicles instead of conventional I.C. engines.

Challenges for NEV Taxi Market

• NEV taxis are still quite expensive despite tax credits and exemptions by governing bodies. This is a major concern in adoption of electric vehicles.
• Current battery technologies used in electric vehicles have a limited charge storage capacity, which restricts the use of electric vehicles to shorter distances or certain assistive tasks such as providing additional force while climbing steep hills or while driving off from a traffic signal. Charging of electric vehicle batteries is a slow process, which accounts for long waiting times. Fast charging technologies are available in the market; however, these technologies raise the temperature of battery packs, thus creating safety issues and the requirement for expensive heat management solutions. Additionally, the availability of charging infrastructure in majority of urban cities around the world is limited, which is likely to restrain the demand for NEV taxis and subsequently, hamper the NEV taxi market during the forecast period.
• The recent outbreak of COVID-19 pandemic hampered majority of businesses across the globe, owing to forced lockdown, which caused people to stay at home. The forced lockdown led to temporary shutdown of taxi services; subsequently, contracting the global NEV taxi market. However, the global NEV taxi market is expected to expand from 2021, owing to economic measures taken by governments to recover from financial losses caused by forced shutdown of business activities during the COVID-19 pandemic in 2020.

Segmentation of NEV Taxi Market

• The global NEV taxi market has been segmented based on NEV type, ownership, vehicle sub-type, range type, vehicle level, and region
• Based on NEV type, the hybrid electric vehicle segment accounted for a higher share of the market. This is majorly due to high demand for low emission vehicles coupled with government tax credit exemptions on their purchase. However, the battery electric vehicle segment is likely to expand at a significant growth rate during the forecast period, as the vehicle is zero-emission, does not emit pollution, and is less noisy.
• Based on vehicle sub-type, hatchback is a highly attractive segment of the NEV taxi market. It is likely to expand and gain market share during the forecast period. Surge in demand for low travelling cost within cities has led to a higher rate of adoption of hatchback NEV taxis in mega cities. Availability of all-electric vehicles and their popularity in developing countries, owing to these vehicles being economical as compared to others, are other key factors that are boosting the hatchback segment of the market. Based on ownership, the company owned segment leads the global NEV taxi market. Leading causes of expansion of the segment are rising urbanization and technology advancements with app-based taxi or cab booking, which enables company-owned taxis to offer services all around.

NEV Taxi Market: Regional Analysis

• Based on region, the global NEV taxi market has been segregated into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
• Asia Pacific accounted for a major share of the global NEV taxi market. Rising demand for electric vehicles in China and Japan, supplemented with availability of electric charging stations is promoting the adoption of NEV taxi in the country. Furthermore, in China, electric vehicles have been the top priority for the auto industry. Moreover, massive installation of charging stations are being carried out coupled with additional tax credits and incentives by the government to adopt NEV taxis to reduce emission levels in the country. These factors are boosting the NEV taxi market in China. China is considered as a leading market for NEV taxi, globally, and it is likely to remain a prominent market during the forecast period. Furthermore, announcement by the Government of India to switch to electric taxis in major cities of the country is also projected to boost the regional market. These factors are likely to boost the NEV taxi market in Asia Pacific during the forecast period.

NEV Taxi Market: Competition Landscape

• Key players operating in the global NEV taxi market include
  • Daimler AG
  • AB Volvo
  • BYD Auto Co., Ltd.
  • Mahindra and Mahindra Limited
  • Toyota Motor Corporation
  • BMW AG
  • Ford Motor Company
  • Honda Motor Co., Ltd.
  • TATA Motors
  • Nissan Motor Corporation
  • Volkswagen
  • General Motors Company
  • Hyundai Motor Company
  • London Electric Vehicle Company
  • BAIC Motor Corporation., Ltd
  • Changan Automobile Company Limited.
  • Beiqi Foton Motor Co., Ltd.
  • JAC Motors
  • Tesla, Inc.
  • Groupe Renault
• Key players operating in the global NEV taxi market are expanding their presence by engaging in mergers and acquisitions or by establishing new facilities. For instance, In October 2020, BYD Auto Industry Co., Ltd (BYD) and Hino Motors, Ltd. (Hino) signed a joint venture agreement to establish a new company for commercial battery electric vehicles development. This new venture is scheduled to be established within China in 2021, with BYD and Hino each making a 50% capital investment.