The global NEV taxi market size is expected to reach US$ 29 billion by 2030, expanding at a compound annual growth rate (CAGR) of 26% during the forecast period 2021 to 2030.
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NEV (New Energy Vehicle) taxi, also called electric taxi, is either fully or partially powered by electricity. The term ‘NEV’ is used by the Government of China for electric vehicles. Rising transportation pollution needs a complete solution that can curtail pollution, which is provided by a NEV taxi. The adoption of NEV taxi is also projected to reduce the running and maintenance cost of the taxi, which, in turn, is anticipated to propel the NEV taxi market during the forecast period.
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.
- 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.
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.
Wireless Charging Technology in NEV Taxis to Help Minimize Street Clutter
EV charging innovations are expected to contribute to the explosive CAGR of 26% 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.
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.
Asia Pacific led the global NEV taxi market, and it is anticipated to maintain its dominance during the forecast period. High market share held by the region can be primarily attributed to the expansion of the electric vehicle industry in the region, especially in China, Japan, India, and South Korea. China holds a major share of the market in Asia Pacific. The country is considered as a global leader in the electric vehicle industry, and accounts for a significant number of electric vehicles and electric charging infrastructure around the world. China held a prominent share of the market in Asia Pacific in 2020. It is projected to maintain its dominance during the forecast period. Furthermore, numerous governing bodies in countries in the region have formulated emission regulations and policies in order to curtail emission level and prompt the shift in preference from existing vehicles to NEVs. This is a prime factor that is projected to drive the NEV taxi market in Asia Pacific during the forecast period.
Prominent 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., and Groupe Renault.
By NEV Type
- Battery Electric Vehicle
- Plug-in Hybrid Electric Vehicle
- Hybrid Electric Vehicle
By Vehicle Sub-type
- Utility Vehicle
- Company Owned
- Individually Owned/Private
By Range Type
By Vehicle Level
- Entry & Mid-level
- North America
- Asia Pacific
- Middle East & Africa
- Latin America
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