Ridehail sector key catalyst for EV adoption - BNEF

Sector faces cost barriers and a lack of targeted government incentives

Ridehail sector key catalyst for EV adoption - BNEF
Ridehail industry needs for government help, BNEF and Uber argue

Greater availability of BEVs for the ride-hail sector is a key catalyst for broader EV adoption in the EU, according to a new report from Bloomberg NEF, commissioned by ride-hail giant Uber.

The report notes that many EV adoption and manufacturing targets are now being pushed back in the current challenging economic environment.

"Maintaining momentum...will require creative solutions to overcome these challenges," says the report. "One way to maximize impact is to focus efforts on key segments in the transport space that will have outsized results. Supporting an accelerated electrification pathway for ride-hailing and other point-to-point, on-demand and shared mobility services is key to these efforts."

If such a pathway is enacted, intense use cycles in ride-hailing will lead to higher vehicle turnover, growing the used vehicle market and boosting the overall supply of BEVs.

Policymakers must therefore help increase the supply of more affordable BEVs suitable for the sector and improve incentives for high-mileage drivers.

The report notes the limited availability of affordable BEVs that are suitable for ride-hailing services.

The majority of BEVs on offer currently are targeted towards the premium market – a barrier to ride-hail drivers who often purchase their vehicles personally and want to target non-premium fare categories.

A suitable price for the majority of ride-hailing vehicles is below $35,000. But the used BEV market is lacking in terms of "quality, pricing, and volume" for such prices to be realised, the report finds.

Fleet challenge

Another challenge is reducing the costs of fleets transitioning to BEVs. Subsidies for fleets purchasing EVs are gradually winding down in Europe, the report notes, with notable examples France and Germany.

When in place, subsidies should prioritise high-mileage drivers for more impact.

"Taxes should be tied to vehicle usage and performance to prevent internal combustion engine or ICE vehicles from lingering in the passenger vehicle population and delaying the transition to BEVs," the report says.

BNEF also suggests that governments should consider corporate electrification targets and mandates that increase the frequency of vehicle turnover.

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