Low Ownership Cost of EVs Likely Post COVID-19
Electric vehicle (EVs) sales have been gaining momentum during the coronavirus pandemic. However, companies in the NEV taxi market are experiencing resistance in car registrations due to the high upfront cost of EVs. Hence, companies are increasing awareness about their low total cost of ownership in the long run. Analysts at the Transparency Market Research (TMR) opine that e-taxis will have a relatively low cost of ownership as compared to conventional taxis in the upcoming years.
India and China are emerging as hot destination for the NEV taxi market post the COVID-19 crisis. The Gujarat model in India has caught the attention of companies, since a significant percentage of taxis and auto-rickshaws are awaiting approval of electric mobility by 2023.
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Collective Experiences Lead to Setting up of Policies for Decarbonization of Mobility Services
Decarbonization in the mobility and energy sector is becoming a fast growing phenomenon in the European Union (EU). However, there is lack of innovative and stable policies that favors the advancements of e-taxis. As such, a gradual increase in EV fleets is contributing to the growth of the Europe NEV taxi market.
In order for EVs to achieve a large market presence, the corresponding regulatory framework needs to be designed to accommodate incentive schemes. Companies in the Europe NEV taxi market are increasing their research efforts to learn from various countries’ experiences and set up forceful policies based on their national priorities of lowering fuel emissions.
Wireless Charging Technology in NEV Taxis to Help Minimize Street Clutter
EV charging innovations are expected to contribute to the explosive CAGR of ~27% of the market during the forecast period. Such innovations are enabling taxi drivers to recharge more easily and minimize street clutter caused by charging devices. The wireless charging technology is gaining prominence in the U.K., which is similar to wireless phone chargers using the inductive charging technology. The U.K. Government is predicted to invest US$ 4.4 Mn in a scheme, which involves 10 electric taxis (e-taxi) in Nottingham to be fitted with the wireless charging hardware for six months.
The wireless charging technology has the potential for broader public use of e-taxis. The U.K. NEV taxi market is benefitting with this new technology that is eliminating the need for plugs and chargepoints.
Fast Charging, V2G Technologies Minimize Driver Range Anxiety, Demand Strains
Vehicle to grid (V2G), ultra-fast charging, and new battery technologies are transforming the global NEV taxi market. This explains why the market is expected to cross the valuation of US$ 29.2 Bn by 2031. Since an average taxi stands idle for several hours, the vehicle to grid model is enabling two-way energy exchange, especially during peak demand, since the energy stored in an EV can be fed back into the grid.
One of the disadvantages of NEV taxis is the need of charging batteries that is a time-consuming process as compared to traditional gas-powered vehicles. Hence, manufacturers in the NEV taxi market are mainly focusing on ultra-fast charging technologies that remove the driver range anxiety.
Large Public Charging Network, EV Production Create Business Opportunities in China
China is creating lucrative opportunities for companies in the NEV taxi market by reaching important milestones in the number of battery operated, plug-in hybrid, and fuel cell vehicles. The rising fuel prices in India is also creating business expansion prospects for manufacturers in the NEV taxi market among those interested in capitalizing on low total ownership cost of EVs.
Currently, China produces nearly half of the world’s plug-in electric vehicles. Since China has been proactive in the production and adoption of renewable energy solutions, the market for NEX taxis holds promising business potentials for automakers.
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Resilient EV sales and long-term growth opportunities in China, India, and the U.K. are grabbing the attention of automakers that are planning finances amid the coronavirus crisis. Moreover, China is gaining popularity for building one of the world’s largest public charging networks. Achieving local air quality improvements is one of the drivers of the market.
However, range anxiety and battery cost are two issues preventing the widespread adoption of NEV taxis. Hence, companies in the NEV taxi market should increase their R&D in sulfide-based, graphene-based lithium-ion battery technologies. They are increasing efforts to eliminate cobalt from existing batteries to reduce their production cost and selling price.
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 ~27% 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 2023 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.