The Battle of New Energy Vehicle Between China and Foreign Countries for Hong Kong’s Taxis

Hong Kong’s taxis are related to the lifeblood of Hong Kong’s economy. Facing the era of new energy vehicles, Hong Kong’s taxis must make a choice when it comes to “the squadron of new energy vehicles between China and foreign countries”! Why said so?

Hong Kong, China, is a prosperous and modern International Financial Center, but once walking through the streets of Hong Kong, we found that Hong Kong’s taxis among the tall buildings are still the highlight of the 1980s.

Problems such as old cars, poor service, expensive fares, aging drivers, etc. frequently occur. Due to the reasons of the taxi compensation rate is ten times higher than ordinary private cars, and other reasons, Hong Kong’s major insurance companies such as Target Insurance, Trinity General Insurance, and China Pacific Insurance, etc.,  the meager taxi income is unsustainable, so Hong Kong’s taxis have been suspended because of operating pressure and other reasons.

According to the annual report of Hong Kong listed company, Target Insurance , the taxi insurance take up nearly half of its overall income, but the loss ratio in 2019 was as high as 151.8%, with a loss of 136.2 million Hong Kong dollars.

Without insurance, taxis couldn’t go on the road, but the majority of taxi drivers still bear high operating costs, and the operating ecology of the entire taxi industry is in decline.

Under weak supervision, Hong Kong’s taxi industry is facing severe challenges.

Don’t think that this is a trivial matter. In fact, Hong Kong’s taxis are the lifeblood of Hong Kong’s economy.

Why said so?

Hong Kong is a service economy city. Service industries such as finance, tourism, and consumption dominate the economy. The service industry in the tertiary industry accounts for more than 90% of GDP. Taxi is an important part of urban transportation services and it is Hong Kong’s “mobile facade”, therefore, high-quality taxis will upgrade the competitiveness of service cities to more than one level.

But these are not the biggest problems. The reform of Hong Kong’s taxis still needs courage of capable people to break the situation.

The key to break this situation rely on a dispute of new energy vehicle between China and foreign countries.

First of all, the author will take you to review the history of the development of Hong Kong’s taxis.

Hong Kong’s taxis were born in the 1920s when the British colonized Hong Kong. Even when the Japanese imperialists invaded and occupied Hong Kong, and the British colonists fled back to their home in the United Kingdom, Hong Kong’s taxis were still brave and fearless to operate normally, and they were responsible for the travel of Hong Kong’s residents.

With the boom of Hong Kong’s economy after the war, the increase in economic activities has increased people’s travel demand, and the number of taxis in Hong Kong has also increased.

According to the records of the Hong Kong Transport Department, the number of taxis increased from 329 in 1947 to 3649 in 1967, and exceeded 15,000 in 1984. Since the 1990s, Hong Kong has tightened the issuance of license plates, so the growth rate of taxis has slowed down. By 2016, the number of taxis in Hong Kong had increased to 18,163, serving 7.5 million Hong Kong’s residents and 60 million tourists every year.

The development of Hong Kong‘s taxis is inseparable from Toyota’s high-end Crown sedans introduced in the 1970s and 1980s, and this type of car is still in use today. In addition, Ford and some old models of Nissan have also been purchased.

But decades later, Hong Kong’s taxis still remain the same as they were in the past, and at the same time, industry problems have frequently occurred.

First of all, Hong Kong’s taxis are old-fashioned, majority occupied with clumsy Nissan and Toyota Crown sedans.

Service quality is also worrying. In 2019, the Global Supply Chain Policy Research Institute of The Hang Seng University of Hong Kong make a survey of around 2,000 passengers based on a total of 13 service quality ratings in three areas: car design, professional attitude, and pavement facilities. The results found that taxi service quality was rating decline year by year, only 27% of respondents mentioned that drivers are polite.

Secondly, behind ordinary services, the price is ridiculously expensive, and it will cost you a few hundred dollars at every turn. Not to mention foreign tourists, even Hong Kong’s residents whose have average income that comparable to those in developed countries like Europe and America getting a taxi also feel expensive.

According to the current fare, 24 Hong Kong dollars fare for 2 kilometers and a 1.7 Hong Kong dollar per 200 meter fare, 10 kilometers will cost nearly 100 Hong Kong dollars.

It is not only the fare is expensive, but also the license fee. Year-round speculation in the license plate has led to nearly 10 million Hong Kong dollars per vehicle at the peak of the red urban license plate.

At the same time, if you take a taxi in Hong Kong, you will find that the drivers are grey-haired old people, and the ageing is becoming more and more serious in the taxi industry in Hong Kong.

Statistics show that 50% of taxi drivers in Hong Kong are over 60 years old, and because the elderly have low ability to accept digitization, it is also difficult for taxi-hailing software to be popularized and developed in the Hong Kong market.

Of course, the most important thing is under the background of carbon neutrality, Hong Kong’s streets are full of large-displacement foreign gasoline cars, without any new energy taxis, not to mention a China’s brand new energy vehicle that has included in the world’s advanced ranks.

Facing the opportunity of new energy, the out-dated Hong Kong’s taxis seem to be late and unbearable.

Therefore, the author raises the ultimate question: Why not encourage the deployment of new energy taxis in Hong Kong through subsidies? On the land of Hong Kong, China, why there are no taxi with China domestic brands on the road?

We have to know that in the early days, Hong Kong had introduced the advanced technological Toyota gasoline-electric hybrid vehicles and BYD, which had not yet led the world in technology, but it was not very successful because of the troublesome and time-consuming in charging.

But with the rise of the new energy automobile industry in mainland China, all these will turnaround.

From new power of car-building such as NIO, XiaoPeng Motors, and Lixiang Auto that listed in the United States, to established car companies such as SAIC-GM-Wuling, BYD, SAIC Motor, and GAC Group, etic. to Xiaomi, which has invested hundreds of billions to build cars, the rise of China’s new energy vehicles has been an undeniable fact.

According to data from the automotive consumer website EV Sales, in the first half of 2021, 8 of the world’s top 20 car companies are China brands, SAIC-GM-Wuling and BYD ranking second and fourth respectively.

XiaoPeng Motors has even been exported to Europe. At the end of August, the first batch of Xpeng P7 new energy vehicles, which have obtained the EU full-model certification, were sent to Norway. The first batch of 60 U5 models of AIWAYS has been sent to Israel. ShangHai WM Motor signed a strategic cooperation agreement with an energy technology company under The Enel Group to promote the export of electric vehicles and the implementation of related businesses.

While the whole vehicle has been recognized by overseas markets, our battery technology has also long been renowned all around the world.

Contemporary Amperex Technology (CATL) CATL has become the world’s largest power battery company, BYD ranks fourth in the world, and China occupies 6 seats in the top ten list of global installed capacity of power batteries. In terms of safety, BYD’s blade battery has break a new record of safety.

Therefore, China brand’s new energy vehicle is worth for Hong Kong’s trust.

If we say that in the era of internal combustion engines, we have lost to the European and American whose industrialization level has been ahead of us for a hundred years. In today’s new energy motors era, we are absolutely confident to say that our products have enough confidence to beat with European and American’s brands.

Hong Kong, the Pearl of the Oriental, once witnessed the big changes a hundred years ago. Now in this Chinese city dominated by the service industry, Hong Kong’s taxis, which are “mobile facades”, are going to face a big change of new energy vehicles again.

Hong Kong has returned to China for more than 20 years. Why is there still lack of China brand’s new energy vehicles that have emerged in the world on this piece of Chinese land? It is worth to think about!