As part of the broader push towards sustainability, ComfortDelGro
“If you look at all the new cars given out last year, they are all either electric or minimally hybrid. The [Toyota] Prius and [Hyundai] Kona are all electric. Even the Lexus cars are all hybrid … All taxis are being replaced with at least hybrid models,” he adds.
It is not just the traditional internal combustion engines of its taxi fleet that ComfortDelGro is seeking to electrify. This shift towards greener vehicles has expanded to hybrid and fully electric buses in its markets, including Singapore, Australia and the UK as well as in other businesses such as its driving centres.
ComfortDelGro is also looking to enter the EV charging business. In September 2021, the group and French utility company Engie won three of five tenders to install 479 of the 632 electric chargers introduced in 2022. In November 2022, ComfortDelGro Engie was awarded two in 10 packages by the Land Transport Authority (LTA) to install EV charging points in nearly 2,000 HDB carparks.
Last October, ComfortDelGro Engie signed an agreement with Malaysia’s Yinson GreenTech (YGT) to offer EV drivers on both sides of the Causeway their combined network of more than 1,000 charging points — close to 400 by YGT in Malaysia now and more than 600 from ComfortDelGro Engie. This will make the combined network the largest in the two countries which see regular and heavy traffic movement. The two parties plan to hold on to this lead by expanding the combined network to 8,000 points by 2030, with 5,000 charge points in Singapore and 3,000 in Malaysia.
The pace of electrification is not decided by ComfortDelGro though. “Part of the challenge of electrification is also how fast the client wants us to electrify their fleet,” Cheng explains, citing his operating contracts with clients in Australia and the UK, where clients get to choose what vehicles to use. Similarly, in Singapore, the pace of electrification for its fleet of buses is determined by owner LTA.
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Where ComfortDelGro’s taxis are concerned, about 65% of its fleet in China is already fully electrified as of last year. “That number will continue to increase because the Chinese government has been very supportive, through various incentive schemes that they have to encourage the conversions of ICE or hybrid to fully EVs,” says Cheng.
In Singapore, however, ComfortDelGro is still “working on it”, although it depends on how receptive the local taxi drivers are to EVs. In this case, Cheng understands that it’s a “chicken and egg” issue because it also depends on the availability of EV infrastructure.
“There are the usual issues that you have to work at for EVs,” says Cheng on why taxi drivers in Singapore are not as receptive. While the current generation of EVs has overcome the issue of range anxiety, he adds that they still take a relatively long time to charge the vehicles.
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Even for fast-charging vehicles such as an e6 BYD, the charge would still take about 40 to 45 minutes. Nonetheless, he is optimistic that the waiting time will be reduced with improving technology.
In April 2023, ComfortDelGro’s then-chairman Lim Jit Poh said the company expects to spend $6 billion to replace the fleet of its ICE taxis and buses with EVs. The amount is slightly over twice ComfortDelGro’s market cap of $2.9 billion on March 1 and about triple the group’s market value.
“The $6 billion was given because this is the group’s long-term spending. And that number includes all the capital expenditure replacements on a general basis,” says Cheng.
“If you look at what we spend on capex annually, on a normalised basis, we probably spend close to $400 million a year pre-Covid. With electrification, that means you add a little bit more because you need to build the infrastructure to support,” he adds. “But during the Covid-19 years, the numbers slowed because the fleet renewal was slower. That’s why we had $6 billion but that is a long-term number spread over 10 to 15 years.”
