Every day, more and more brands are adapting and creating new electric vehicle models. We are all clear about the difference between the two, but do we know the difference in profitability? In the case of a professional taxi driver, which is more profitable, an electric or a combustion taxi?

Is a 100% electric vehicle profitable as a taxi?

When analysing the profitability of a 100% electric taxi, only a thorough and detailed analysis with each individual taxi driver is worthwhile. Based on the operating model of each owner, the TCO (Total Cost of Ownership) is established for each case, trying to ensure that the car adapts to the operating model of the taxi driver and not the other way around.

However, the owner of a 100% electric taxi must establish operational criteria that allow him to maximise the profitability of the electric vehicle’s features. Currently, opting for a 100% electric taxi means making an investment at the time of purchase that is higher than the average for all approved taxi models. This overinvestment must then be more than compensated on the basis of two main items of expenditure (fuel and maintenance) and one of revenue (turnover).

What are the energy savings of a 100% electric taxi?

Compared to the purchase of the vehicle, which is the main item of expenditure in the case of electric vehicles, fuel accounts for only 10-15% of the total expenditure in the TCO study. In this way, the main cost item in a conventional taxi becomes the main saving concept in the case of using 100% electric technology. It should be borne in mind that an electric vehicle has an energy cost, depending on the electricity tariff selected, of around €1.5/km compared to €8/km for diesel and €7/km for petrol hybrids. We are talking about energy savings of even more than 80% compared to thermal models that are used today as Autotaxi in almost all European cities.

Table 1

KM/YEAR 60.000
Total cost Cost (€/km) Cost (€/year)
Electric 0,014 862 €
Diesel 0,080 4.825 €
Petrol 0,072 4.344 €
( km /year)
Annual Energy Savings EV versus… 60.000
diesel model assessed 3.963 €
petrol model evaluated HIBRID 3.482 €
Operating period (years) km/year
Energy Saving VE e6 versus … 5 60.000
diesel model assessed 19.813 €
petrol model evaluated HIBRID 17.408 €

Table 1 shows a concrete example of the comparison with a taxi operator in Barcelona that manages a large fleet of taxis. According to their operating data, an annual energy saving of almost 4,000 € compared to a representative diesel model in the taxi sector can be seen for this specific case. And a saving in round numbers of €3,500 compared to an equally representative petrol-hybrid model serving Europe’s major cities.

What are the maintenance savings of a 100% electric taxi?

Maintenance, both preventive and corrective, represents the second largest item of expenditure in the TCO of a conventional combustion-engine taxi after fuel and without taking into account the investment cost of purchasing or financing the vehicle. If you take into account the investment at the time of vehicle purchase in a 5-year TCO analysis, you would see that both are similar or even higher in the case of maintenance.

Table 2

BREAKDOWN OF INVESTMENT (TCO 5 YEARS)
VECONVENTIONAL
Vehicle acquisition54%20%
Energy consumption9%50%
Maintenance17%20%
Insurance14%9%
Residual value6%1%
TOTAL TCO (5 years)100%100%

Table 2 summarises a case study from a comparative TCO analysis by a taxi fleet manager. A comparison is made between a 100% electric model and a representative approved diesel within the taxi sector. Beyond the specific data, which vary significantly depending on the models chosen, it should be borne in mind that the taxi sector uses both high-end models, strongly consolidated in premium services, as well as models considered to be the best in the market. “low cost” that are beginning to be introduced in some Spanish cities. The data show that the weight of each of the expenditure items differs between the two technologies.

The strong impact that maintenance has on the cost items of a traditional taxi is justified by the need to maintain and often repair components of the engine, timing, clutch and gearbox, in addition to the maintenance of systems subject to wear and tear: brakes (pads and discs), levels, suspension, steering and tyres, mainly.

Different brands with 100% electric models confirm a 40% saving in maintenance compared to combustion models approved as taxis. Due to the simplicity of the 100% electric drive technology, not only are the costly interventions that a “thermal” taxi has to face eliminated, but also the common wear and tear elements are becoming an added cost-saving factor. Thus, the way an EV is driven and the driver’s commitment to efficiency leads to less wear and tear on the components common to both technologies.

Will there be a higher return on turnover in the 100% electric taxi?

The added value that an electric model brings to the taxi service in a city should not go unnoticed by the public. Customers using a 100% electric taxi would overwhelmingly repeat, according to the experiences being reported by the first fleets being introduced in major European cities. In addition, they are helping cities to lower emissions levels directly in the sector that is penalising the most.

New communication technologies applied to taxis, such as Tablet or Smartphone applications for booking services, are already adapting to the emerging demand for electric taxis. In addition to the technological development, which presents the service order at the click of a button, the efforts of the Administration in promoting this technology should be added.

It will be the sum of technology-private promotion and city policies in support of electric taxis that will increase the demand for 100% electric taxi services. In this way, while the administration promotes their use, technology and industry “broadcasters” will encourage the booking of services. The booking of services plays a key role, not only in increasing turnover, but also in profitability through the effect on the ratio of “kilometres billed” to “kilometres driven”. Empty driving distances are minimised and cost-effectiveness soars.

The 100% electric taxi is the present and the future of urban mobility.

The 100% electric taxi is already a reality that is gradually being introduced in the main European capitals, such as London, Brussels and Amsterdam, among others, where they already have large fleets providing service. And those that have not introduced representative fleets are in the process of doing so in the coming months.

With the reactivation of the MOVELE electric vehicle subsidies, more fleets are expected to be introduced in different Spanish capitals where there is special interest in promoting this quality service for collective mobility. It is to be expected that in the immediate future any European city that prides itself on improving the quality of life of its citizens based on the reduction of emissions and the promotion of sustainable and efficient mobility, will propose a strategic plan for the gradual introduction and expansion of 100% electric taxi fleets.