BYD launched an city electric public transport solution: the ‘Zero vehicle purchase price, Zero costs, Zero emissions’ solution for the taxi and bus market.
China Development Bank will provide financial support for the scheme. The scheme aims to ease the financial pressure on taxi and pay the full amount upfront for the purchase of electric vehicles. It provides a realistic and feasible path to speed up public transport electrification.
Zero vehicle purchase price: free choice from three models
The so-called ‘Zero vehicle purchase price’ means that enterprise clients do not need to bear the vehicle purchase cost in one go, but it can purchase vehicles on a ‘zero initial payment + payment in instalments’ basis.
To allow different types of clients to benefit from this, BYD is launching three operating models: a financial lease, an operational lease and buyer’s credit. This also fulfils the different requirements of taxi and public bus companies.
Clients can choose what suits them best.
|Model||Financing Body||Lease Period||Ownership|
|Financial lease||Finance company||A complete electric vehicle operational life cycle (e.g. 5 years)||During the lease period, the financial organisation owns the electric vehicle. The taxi company pays the lease in instalments. After the lease period ends, the taxi company owns the vehicle.|
|Operational Lease||Third party vehicle lease company||A complete electric vehicle operational life cycle (e.g. 5 years) or a shorter period (e.g. 1 year)||During the lease period and after it ends, the vehicle lease company owns the vehicle. The taxi company and vehicle lease company sign an operational lease contract for the lease.|
|Buyer’s Credit||The taxi company||The taxi company has ownership of the vehicle. The taxi company pays monthly instalments to the financial institution.|
Zero costs: a profitable operational scheme
The new plan not only realises ‘zero initial payment’, but also because the price of electricity is much lower than that of petrol, the cost saving from usage will far outweigh the higher cost of purchase for the electric vehicles and even outweigh the higher cost of purchase itself. In Shenzhen for example, the BYD e6 taxi, after subtracting the 60,000 RMB ($9,500) government subsidy and 60,000 RMB local subsidy, the actual price is about 180,000 ($28,800). A Shenzhen taxi travels an average of 450km per day and operates for 353 days a year (taxis on average have a one-day service each month). It is estimated that the average fuel taxi consumes about 9 liters of petrol per 100km, and the price of petrol is 8 RMB per liter. But the e6 pure electric taxi consumes 26 kw per 100km, and the average price of electricity is 0.66 RMB. So each electric taxi saves 247 RMB per day, 7,166 RMB ($1,147) per month. If the hire car runs for 5 years, and the total saving over 5 years is deducted from the higher cost of the vehicle and the interest on multiple payments, it can save 326,400 RMB. This will be the profit in the operation of the pure electric vehicle.
|Project||Regular fuel taxi||e6 pure electric taxi||Profit of pure electric vehicle compared to fuel vehicle|
|Operating expense over 5 years (RMB)||563,760||133,803||429,957|
|Price of vehicle (RMB)||100,000||180,000||-80,000|
|Tax of purchase (RMB)||8,547||15,385||-6,838|
|Interest incurred (RMB)||0||16,673||-16,673|
|Saving over 5 years (RMB)|
At the same time, the new scheme of BYD converts a single payment into monthly instalments. During the agreed period, the saving from fuel/electricity each month is greater than the monthly payment. Even if it’s monthly payment only without any down payment, the fuel/electricity saving is still sufficient to cover the monthly payment, greatly reducing the monthly pressure on the buyer. For example in Shenzhen, the sale price of each e6 taxi is 180,000 RMB (after deducting the national and local subsidies totalling 120,000 RMB), there is a five year loan without down payment, the monthly payment is 3,576 RMB, and the fuel/electricity saving per month is 7,166 RMB. This is equivalent to the customer only needing to use 50% of the money saved to pay the monthly instalment.
Zero emissions: Convenience of charging with electricity replaces consumption of petrol
The scheme of ‘Zero vehicle purchasing price, Zero costs, Zero emissions’ not only provides convenience of purchase and saves operating costs for public transport and taxi companies, but also brings substantial social value. As the vehicles are pure electric, zero emissions and zero pollution, once scaled up, the energy saving and emissions reduction will be very significant. An e6 electric taxi saves 14,120 liters of fuel per year, with 32 tonnes fewer CO2 emissions, truly implementing zero emissions, zero pollution and green driving. If the 1.2 million taxis in China were all replaced by pure electric vehicles, in one year, 169 million liters of fuel could be saved, and CO2 emissions reduced by 38.62 million tonnes.
To support the scaling up of electric vehicles, BYD will join with electricity grid companies to develop the infrastructure, providing planning and technical support for the development of charging stations. BYD is also responsible for maintenance of the vehicles to resolve any problems encountered by the buyer during use of the new energy vehicle. Through this innovative model, BYD has broken the bottleneck on the promotion of new energy vehicles. It has resolved the difficulty of applying the sustainable development of zero emissions public transport in cities.
The scheme has already gained the support of China Development Bank. It’ll combine the financial strength of the bank with the industrial power of BYD. The parties plan to develop a financing platform, and to establish a financing model of full cooperation between a new industry group and financial group, to realise win-win for manufacturers, investors, operators and consumers and promote scaled up operation of electric public transport.