Electric Vehicle Taxi Market Assessment, By Propulsion Type [Battery Electric Vehicles, Hybrid Electric Vehicles, Plug-in Hybrid Electric Vehicles, Others], By Vehicle Type [Four-Wheeler, Three-Wheeler, Two-Wheeler], By Region, Opportunities and Forecast,

Electric Vehicle Taxi Market Assessment, By Propulsion Type [Battery Electric Vehicles, Hybrid Electric Vehicles, Plug-in Hybrid Electric Vehicles, Others], By Vehicle Type [Four-Wheeler, Three-Wheeler, Two-Wheeler], By Region, Opportunities and Forecast, 2020-2031F

Global electric vehicle taxi market is projected to witness a CAGR of 12.65% during the forecast period 2024-2031, growing from USD 33.5 billion in 2023 to USD 86.87 billion in 2031. The market has experienced significant growth in recent years and is expected to maintain a strong pace of expansion in the coming years.

The transforming infrastructure of propulsion systems around the world is pushing authorities to adopt electric vehicles as an alternative option for vehicle rentals. The growing demand for EVs is due to the concerns regarding vehicle emissions and government spending on EV infrastructure, where fleet owners are choosing EVs over conventional fuel vehicles. Road transport is a major contributor to air pollution around the world. It uses most of the energy and burns most of the oil in the world. Governments around the world have imposed strict regulations on car manufacturers to reduce the increasing levels of air pollution. Environmental regulations in developed and developing countries are focused on reducing vehicle emissions. New energy vehicles reduce travel expenses compared to traditional cars and require less maintenance. The higher adoption of EVs in the form of a taxi is due to the rapidly increasing gasoline prices.

In December 2023, the Hong Kong Tele-call Taxi Association finalized a deal with BYD, an e-vehicle maker, amid a government-backed drive. The deal will introduce 3,000 electric cabs in the coming four years.

Increased EV Sales and Lower Operating Costs to Drive Market Growth

As EV owners increase around the world, the level of familiarity and comfort with EV technology rises. It leads to an increase in demand for EV taxis among the public. Many governments are offering financial incentives for EV purchases and electrification of taxi fleets. It means that the upfront cost of EVs for taxi operators is much lower, making EVs more affordable. Consumers and businesses are increasingly concerned about climate change and are looking for more environmentally friendly options. EV taxis meet the growing need for sustainable transportation. EVs have much lower operating costs than gasoline-powered vehicles. It is due to lower fuel costs, lower maintenance costs, and potential cost savings depending on the charging infrastructure. Operating an EV fleet shows a company’s commitment to sustainability and green initiatives, which helps to increase brand image and attract environmentally conscious customers.

In January 2023, ANI Technologies Pvt Ltd. (Ola) announced that it is going to launch its premium electric vehicle fleet of 10,000 cars. The new fleet is expected to be operated by professional drivers and will also be providing 100% ride allocation.

Reduced Vehicle Emissions and Improved Electric Infrastructure to Boost Market Growth

The demand for electric vehicles is on the rise due to the concerns regarding vehicle pollution and the government’s investments in the infrastructure for electric vehicles and initiatives to increase demand for electric vehicles. Fleet owners are choosing electric-powered vehicles over conventional fuel vehicles due to lower operating and maintenance costs compared to traditional fuel vehicles. More fleet operators around the world are attempting to transition to electric taxis from traditional fuel-based taxis. Certain cities and regions prioritize EVs for taxi operations through dedicated lanes, preferential parking, or charging infrastructure access. It provides operational advantages for EV taxi fleets. The integration of mobility-as-a-service (MaaS) has delivered major transportation solutions including e-hailing and EV taxi services.

Widespread adoption of EV taxis directly translates to lower vehicular emissions, contributing to cleaner air and improved public health. It aligns with global efforts to combat climate change and air pollution. EVs operate much quieter than gasoline vehicles, creating a more pleasant and less stressful experience for passengers and surrounding communities.

In December 2023, London Electric Vehicles Company (SuperMega Corp) introduced an L380 high-end EV taxi for end users. The announcement has been made under the transition of L3880's transition from a high-end taxi producer to a leading supplier of e-mobility solutions.

Governments Focus on Minimizing Carbon Emissions to Drive the Market

Government policies and initiatives are crucial to bridge the cost gap. Enabling access to reliable and affordable charging infrastructure is essential for large-scale EV taxi adoption. Concerns about limited driving range compared to gasoline vehicles can deter some passengers from using EV taxis. Overall, increased EV sales and lower emissions create a positive environment for the global EV taxi market. Addressing the challenges and capitalizing on the opportunities will be crucial for unlocking the full potential of EVs in the taxi industry, contributing to a more sustainable and environmentally friendly transportation future. The government is constantly working towards building new charging infrastructure.

In January 2024, the United States granted about USD 150 million to repair charging stations. The program run by the United States Department of Transportation Federal Highway Administration includes 24 recipients in 20 different states. The program is expected to repair and replace around 4,500 charging ports.

Availability of Dual-Propulsion to Help HEV Segment to Dominate the Market

Based on propulsion type, hybrid electric vehicles outperform other segments. These vehicles are made up of dual power sources, i.e., ICE (internal combustion engine) and EV (electric motor). High power, low emissions, and improved fuel efficiency are the main reasons why HEV dominates the market. The increasing stringency of vehicle emissions is another reason for the dominance. Dual propulsion options provide more strength and stability to the vehicle while producing new options for the end-users. Furthermore, hybrid electric vehicles are the milestone in the transition phase that allows taxi owners to switch between fuel types.

For instance: Toyota Motor Co. Ltd revealed the new LPG HEV taxi concept. The concept integrates electric power with Autogas. The company is likely to deploy these taxis in multiple parts of the world.

Asia-Pacific Dominates Electric Vehicle Taxi Market

The governments of countries in Asia-Pacific, such as China and India, have put in strong support policies such as subsidies, tax exemptions, dedicated EV lanes, and other incentives to encourage EV manufacturers and operators. It is due to the region’s dense urban populations, many of which suffer from air pollution and heavy traffic. EVs are a sustainable and effective solution for urban transportation, making them especially attractive in the area. Also, APAC consumers are willing to adopt new technologies such as EVs. The initial acceptance has opened a larger market for EVs and has led to further innovation. Major EV manufacturers like BYD, and Hyundai are based in APAC which means that they can produce EVs locally, which reduces costs and ensures that there is always a supply of EVs to meet the needs of taxi fleets. Companies of emerging economies are supporting each other in expanding technology while strengthening the supply chain.

For instance, in March 2023, China’s BYD partnered with India’s EV cab service Evera. BYD is going to deliver 100 e6 station wagon EVs. The deal involves the distribution of blade batteries. It is expected to expand the EV taxi fleet in two major economies of Asia.

Future Market Scenario (2024 – 2031F)

Lower operational costs, and increased adoption of e-hailing and e-ride platforms are expected to drive the market growth during the forecast period.

Government authorities and charging infrastructure of private building are projected to provide undivided support to the expansion of the market.

Government incentivizing and subsidizing electric and hybrid vehicles are expected to gain momentum for the global electric vehicle taxi market.

New startups with green technology and environment-friendly transportation solutions are increasing the demand for EV taxis.

Key Players Landscape and Outlook

The competitive landscape for electric vehicle taxis includes brands as well as startups. The key players are focusing on public-private partnerships with brands undertaking government transportation projects. The companies are focusing on revamping their application with better user interface and device compatibility. Furthermore, the competitors are working on increasing the range, easing the payment methods, and accurate navigation system.

For instance, in December 2023, BluSmart Mobility Pvt. Ltd. announced its new pricing structure that intends to enhance ride availability and reliability during peak hours. The long shift in the company policy is likely to add ease in end-users.

In October 2023, Snap E Pvt. Ltd, an app-based on-demand electric cab service announced its fleet size to 600 vehicles in Kolkata.