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A discussion on the application of Electric Vehicles to Taxi Cab Fleets

The sharp rise in the use of Electric Vehicles has important consequences for the United States, Europe and emerging economies worldwide: this week it has been estimated that by 2025, 1 in 6 cars sold worldwide will be Electric1. Electric Vehicles provide an opportunity for countries to reduce their emissions and build towards a sustainable future, and the fast growth of this sector means that there are a wide range of employment opportunities available. Two of the EEC’s leading Experts have discussed the potential for electric vehicles in taxi fleets, specifically focusing on Brazil, with lessons that can be translated to countries worldwide.

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Electric vehicles became an alternative to attain emission goals mainly after the Paris Agreement set forth under the United Nations Framework Convention on Climate Change (UNFCCC) in 2016. Thus, countries such as China, US, Norway and others set aims to replace part of their conventional vehicles fleet by electric vehicles so as to reduce greenhouse gas (GHG) emissions. Brazil faces a different reality than these other countries, and the use of electric vehicles are still limited to few consumers wherein most of them are commercial companies. Barriers such as high acquisition cost, low autonomy, lack of fast recharge infrastructure and the lack of information contribute to make the situation worse. This paper brings some information about the use of electric vehicles in taxi fleets in two Brazilian cities and their impacts.

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Although the modern history of electric vehicles gained momentum from the 1960’s onwards, this type of vehicle is an old technology which appeared during the 19th century and was created even before the vehicles powered by internal combustion engines. However, despite some of its advantages such as no exhaust emission, electric vehicles always had challenges to overcome, such as low autonomy and long recharging time. With the emergence of internal combustion vehicles, electric vehicles were left aside. Only from the 1960’s, when oil prices began their upward trajectory and air pollution stemming from internal combustion vehicles reached record highs, electric vehicles became an option to reduce the use of gasoline, even though they faced many difficulties to be introduced to the market in the following years.

EEC course studentCurrently, the reality is different in many countries, such as China, US, Norway, United Kingdom, Germany, Netherlands and France, which have been establishing goals to the insertion of electric vehicles in 2020 – 2030. Each country has a specific goal. For example, the sales of conventional vehicles will be banned in Norway from 2025 onwards and, in France, from 2040. These are part of the plan to achieve the goals of Paris Agreement on climate change in an attempt to reduce the emissions mainly from the transportation sector. All these goals are only possible when the technological progress in a country creates the conditions for the improvement of electric vehicle autonomy and recharge (key points for consumer compliance). Also, when government incentives contribute to reduce electric vehicle costs through tax deductions, bonuses to buy an electric vehicle, free parking, electricity discount and other inducements. Figure 1 shows the number of electric vehicles in different countries in 2015 and 2016, according to data published by the IEA – Global EV Outlook (2017).

Total EV by country

Figure 1 – Number of electric vehicles in different countries in 2015 and 2016.

In Brazil, the introduction of electric vehicles is slow compared to the countries previously mentioned, mainly due to three reasons: (i) the country does not have adequate technology to produce electric vehicles, which directly impacts acquisition cost; (ii) there are not enough recharge infrastructure for vehicles nor public policies to regulate the electricity price specifically for this kind of service; (iii) and there are no government incentives to help consumers to buy an electric vehicle. According to data provided by the National Association of Automotive Manufactures, the electric vehicles fleet in Brazil, by October 2017, amounted to about 6.3 thousand light commercial vehicles, considering both hybrids or purely electric. It is also worth remembering that these vehicles are still limited to some private cars, taxis and a few pioneer entrepreneurs and their own fleets, often provided by manufacturers. Despite the slowness of the introduction of electric vehicles in Brazil, the country has a potential to have electric vehicles in its fleet. However, in order to fulfill this potential, a plan laying out strategies for public policies, government incentives and knowledge propagation must be designed, as it has been done in other countries. Disseminating knowledge is especially important since the consumer still knows little about this innovative technology, how it works, how much it costs, as well as its advantages and disadvantages. Besides, new habits and some adaptations, such as recharging the vehicle at home or in a fast recharge station, should be learned and adopted by users. Figure 2 shows the number of electric vehicles in Brazil from 2011 to 2017.

Total EV Brazil

Figure 2 – Number of electric vehicles in Brazil.

To answer possible consumer questions, it is important to weigh up the advantages and disadvantages of the use of electric vehicles. Some studies show that the introduction of electric vehicles in the market could contribute to reduce oil dependence and influence the use of renewable energy sources. Furthermore, it can contribute to (i) increase the energy efficiency of the transportation sector (Yagcitekin et al, 2015), (ii) reduce carbon emissions (Dhar; Pathak; Shukla, 2016; Li, 2016) and noise (Höyer, 2008), and (iii) decrease maintenance costs (Riezenman, 1992), which could lead to higher efficiency (Bradley and Frank, 2009) when compared to conventional vehicles. Besides, many countries are encouraging people to buy an electric vehicle based on government incentives, such as bonuses in the acquisition cost, free parking, license to travel in exclusive lines and discount in electricity price.

However, despite the improvements that electric vehicles could bring to the user, there are some disadvantages that should be discussed. Electric vehicles still have the autonomy as a limiting factor for consumers that travel more than 150 – 200 kilometers per day. In Brazil, whose geographic extension is above average, in general, people usually travel more than 300 kilometers around 3 or 4 times per year. In this case, considering the low autonomy of electric vehicles and no recharging infrastructure, consumers will probably not change the conventional vehicle to an electric one. Another point to mention is the recharge mode, which can be carried out at home or in fast recharging stations, still demanding a time which some consumers are not willing to spend. If the consumer decides to recharge the vehicle at home, it will most likely take 8 to 12 hours to recharge full battery, depending on the voltage and the type of battery. On the other hand, in a fast recharge station, this period falls to 1 – 3 hours, also depending on the type of battery. Figure 3 streamlines these considerations and lays out other direct and indirect effects of the introduction of electric vehicles.

Direct and Indirect Impacts of EV

Figure 3 – Direct and indirect impacts of electric vehicles.

It is important to mention that Greenhouse Gas (GHG) emissions reduction and energy consumption, considering a global balance (which means the whole life cycle of fuels and vehicles – production to final disposal), will depend on the energy matrix of the country analyzed. An energy matrix based on coal, for example, will have higher CO2e (Equivalent Carbon Dioxide) emission factor than a country based on renewable sources, which will directly impact on emissions from electricity generation. China and the US, for example, have high emissions from electricity generation, but these countries also have considerable investments and government incentives to increase the introduction of electric vehicles. In general, fleet electrification will help to reduce emissions on the road, which could contribute to public health improvement, reduction of diseases associated with air pollution, such as lung and cardiovascular problems. Besides, it is easier to inspect and control a few number of power industries than millions of vehicles.

Population and emission from electricity generation

Fig. 4 – Population and emission from electricity generation in several countries.

Results from Previous Case Studies

As previously mentioned, in Brazil there are a few electric vehicles, mostly being tested for use in public transportation. For instance, an electric bus with autonomy of 250km has been tested by the BYD company in several Brazilian cities (Belo Horizonte, São Paulo, Curitiba, Salvador and others), and variables such as performance, energy consumption, driver behavior, among other parameters were taken into account. Other initiatives are car sharing in Recife and São Paulo, which aims to reduce road traffic and emissions. Regarding recharge stations, some of the main capitals have some fast recharge points in malls, airports, touristic points and universities, yet they are still too few to cover Brazil’s wide geographic extension. In São Paulo, for example, commuting from nearby cities is too common and normally requires traveling more than 100 kilometers per day. In this case, the autonomy of the electric vehicle are a complicating factor.

Due to short travel distances, high mileage over the years and intermediate waiting time, conventional fossil fuel taxis are ideal candidates to be replaced by electric vehicle. In addition, they can help to increase the visibility of electric mobility and encourage consumers to purchase electric vehicles (Asamer et al., 2016). It is a way to largely display electric vehicles and approach them to people, thus contributing to disseminate information regarding this type of vehicle. In a previous work (Teixeira and Sodré, 2016) it has been pointed out that, in Brazil’s case, since the cost of acquiring an electric vehicle is still very high, switching to an electric vehicle would only be worthwhile if the vehicle was used as source of income, as is the case of taxis.

Accumulated Consumption and Emissions

Figure 5 – Accumulated fuel energy consumption and CO2 emissions of conventional vehicle, and accumulated electric energy consumption of electric vehicle.

Some Brazilian capitals have been investing in electric taxis. In 2012, São Paulo and Rio de Janeiro incorporated the Nissan Leaf electric model in the taxi fleet as a test. The electric taxis circulated, in general, in urban areas and could be recharged in fast recharge points located in strategic places like airports. The results of the project showed a reduction of around 13 tons of CO2e stemming from the use of electric taxis instead the conventional ones, in addition to savings that amounted to £ 2,500 per year for each taxi. In 2017, Belo Horizonte began to incorporate some units of Toyota Prius in its fleet and BYD company started some tests with the e6 model.

A study developed by Teixeira and Sodré (2016) in Sete Lagoas, a city located 72 km from Belo Horizonte, analyzed the replacement of conventional vehicles by electric vehicles in the taxi fleet, taking into account energy consumption, CO2 emissions, and the economical scope from two different vehicles – one conventional and one electric. Both vehicles were simulated using the FTP-75 driving cycle in the software AVL Cruise, considering some parameters such as weight, flat and straight road, cold start engine, and driving profile according to the chosen cycle. Figure 5 shows the results of fuel/electric energy consumption and emissions (for conventional vehicle). The accumulated energy consumption of the conventional vehicle is around four times higher than the electric vehicle. The replacement was evaluated in four different scenarios which considered different emission factors from electricity generation and different distances traveled.

Emissions Electric Vs Combustion

Figure 6 – Ratio between CO2 emissions from vehicles powered by internal combustion engines (ICEV) and electric vehicles (EV).

Figure 6 shows the ratio between CO2 emissions from conventional vehicles and from electric vehicles. Scenario 1 was considered with a constant 30 gCO2/kWh as an emission factor; scenario 2 with a variable emissions factor 30 – 50 gCO2/kWh; scenario 3 with a constant 90 gCO2/kWh as an emission factor; scenario 4 with a variable emissions factor 90 – 140 gCO2/kWh. For all of these scenarios, an annual growth of 5% in the emissions factor was ascribed. These values for emission were chosen based on data from the Brazilian Ministry of Science, Technology and Innovation with the idea to simulate two different realities: one with favorable environmental conditions where the hydro power could handle the demand with minimum need for thermoelectric power, and other with unfavorable environmental conditions (which required a more intensive use of thermoelectric power plants). Results showed that for scenarios 1 and 2, which have a low emission factor, CO2 emissions are around 50 to 64 times lower when electric vehicles are used instead of conventional. During the period considered, there is a reduction in this difference, but in 2030 electric vehicles still show advantages considering the emissions scope.

In the economic part, the variables taken into account were the acquisition price, operation cost, maintenance cost, inflation rates of 4% yr. for fuel cost and 4.86% yr. for electricity, and taxi drivers income. The acquisition price of conventional vehicles was estimated at around USD 8,780, and electric vehicles around USD 34,382. Fuel cost in 2015 was 1.046 USD/L and electricity cost in 2015 was 0.226 USD/kWh. The maintenance costs of electric vehicles were considered to be half of the conventional ones (0.215 USD/km) (Wang et al, 2015; Bickert et al, 2015). The cash flow covered a five-year period since this is defined by the Brazilian law as the maximum time that a vehicle can be used for the taxi service. Results showed that only in the first year the cash flow is higher for the conventional vehicle, due to the acquisition cost. However, in the following years the operation and maintenance costs of the conventional vehicle were higher than the costs for electric vehicles, mainly because of the better efficiency and lower electricity prices, as compared to fuel prices. Besides, the net present value in 2020 would be higher for electric vehicles when compared to the conventional ones.

Cashflow and Present Value

Figure 7 – Cashflow and present value during the period 2015 – 2020.

Another study presented by Teixeira and Sodré (2017) analyzed the profile of taxi drivers through a structured interview with 238 taxi drivers in Belo Horizonte to evaluate their knowledge about electric vehicles, their habits and to characterize the taxi service. The interviews were conducted in 149 taxi stations in all administrative regions in the state’s capital. In general, taxi drivers were interested to know more about the research and the electric vehicles, the costs involved, type of recharge and if this technology is better than conventional vehicles. Some results of the interviews are in Figs. 8 and 9. The interviewees were questioned about the factors that could represent a barrier to change the conventional vehicle by an electric one and the purchase cost, lack of information and lack of government incentives were the most cited, representing 19.66%, 14.19% and 14.47% respectively. Besides, around 24% of the interviewees did not answer this question. Thus, around 38% of the interviewed taxi drivers do not have information about electric vehicles and its characteristics.

Preventing Factors

Figure 8 – Factors that prevent the replace of ICEV by EV (%).

For statistical purposes and to evaluate the relation with knowledge about electric vehicles, the education level of the interviewees was assessed. Results showed around only 48% have completed high school and 7% college. Figure 9 shows the relation between the education degree and the advantages of electric vehicles cited by the taxi drivers. An increase in the education level shows a reduction of interviewees which did not answer this question, which means higher education level probably implied more information about modern technologies concerning electric vehicles. An increase in education level could correlate to more concerns about environmental issues, such as CO2 emission reductions stemming from the use of electric vehicles.


Advantages of EV

Figure 9a – Advantages of the electric vehicle cited by taxi drivers considering the education degree:
(A) elementary school

Advantages of EV

Figure 9b – Advantages of the electric vehicle cited by taxi drivers considering the education degree:
(B) high school

Advantages of EV

Figure 9 – Advantages of the electric vehicle cited by taxi drivers considering the education degree:
(C) college.















Concluding Remarks

Considering all the aspects and information gathered above, it is possible to imply that information is one of the most important topics when discussing the introduction of electric vehicles. Even though the aforementioned aspect, economic factors also have significant importance, especially in Brazil where the cost to acquire and maintain a vehicle is considerably high. Therefore, it is imperative to get support from the government to reduce import taxes or encouraging industries to produce electric vehicles in the country. The government could also provide other inducements to population, encouraging people to change their conventional vehicles. Environment and efficiency are also two relevant factors when discussing the introduction of electric vehicles in a country’s fleet. However, they are not the primary aspects considered by the ordinary consumer, i.e., even though the population with higher education level considers environment as one of the principal characteristics of an electric vehicle, they still consider the cost as a key aspect.

Ana Carolina Rodrigues Teixeira, Pontifical Catholic University of Minas Gerais and José Ricardo Sodré, Birmingham City University

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