Taiyuan, the capital of Shanxi province, replaced 8,000 petrol-powered taxis with electric vehicles in a single year. What did we learn?
Traditionally, Taiyuan has had little to distinguish itself from most other Chinese cities. As the capital city of Shanxi province in the north-east, it is best known as a coal-mining economy and home to many of the industry’s wealthy owners.
But recently it has entered the national spotlight. In the space of a year, Taiyuan has shifted its entire taxi fleet from petrol power to electricity. Thanks to strong support from the local government, electric vehicle (EV) sales in the city accounted for 7% of total car purchases in 2017, compared to 1% globally.
What’s happening in Taiyuan serves as an important lesson for other cities as governments struggle to shift economic growth away from heavy industry towards more sustainable models of development.
By reducing the number of petrol cars on the road, the city is tackling its car pollution problem while shoring up China’s position as a leader in clean technology.
Taiyuan illustrates how with the right policy support, a town can deliver rapid change. But the city still has plenty of conventional cars on its roads and its experience also shows the risks of moving too quickly.
Taiyuan’s taxi switch
In 2015, Shanxi’s coal output stalled before shrinking by 14% the following year. In need of new sources of economic growth, Taiyuan’s government began working hard to court the country’s burgeoning electric vehicle sector.
In 2016, and with little fanfare, the city switched its entire taxi fleet to electric cars (excluding the private cars used by services like Didi and Uber). Chinese vehicle manufacturer BYD sold 8,292 E6 vehicles. So how did a city built on coal wealth come to have more electric taxis than any other in China?
China is the world’s largest car market. Its leaders have set ambitious medium-term goals for automotive efficiency and climate change, including a cap on carbon emissions by 2030. In September 2017, they went further and announced plans to ban combustion engine cars altogether (though no timeline was announced).
China began promoting EVs in 2009, initially across ten cities. However, Taiyuan was not one of them. In fact, its cold temperatures can limit the effectiveness of the lithium-ion batteries used by EVs, potentially reducing the distance vehicles can travel.
Nonetheless, in March 2016 manufacturer BYD set about opening its first factory in Taiyuan. Today, six other EV makers have facilities there. And BYD alone is expected to contribute 5% of the city’s GDP.
This is partly due to support from local government, which is working hard to lure carmakers.
Like most of China’s city’s, Taiyuan has a public taxi fleet owned by several companies. In recent years this has been supplemented by an unofficial taxi sector, which operates in much the same way as Uber, with private drivers offering their services through a mobile application.
Public taxi drivers buy their own vehicles (or lease them from companies). However, it’s the local government that decides the type of cars that can operate as public taxis through mandatory purchase requirements.
The contract to buy over 8,000 BYD cars, which retail at 300,000 yuan (US$46,000) each, was a welcoming signal to the EV sector.
Taiyuan’s city planners also promised to replace all public buses (some 2,650) with electric ones, which is expected to complete this year.
In recognition of its EV policies, Taiyuan also made the International Council on Clean Transportation’s list of 20 EV Capitals last year – a ranking of cities with the highest EV sales.