Trends related to urbanization and traffic congestion have created opportunities for micromobility. Microcars – compact, three- and four-wheelers governed by varying regulations related to the maximum speed of the vehicle, engine cubic capacity (battery kilo watt in terms of electric) in different countries – effectively target urban mobility needs. They can be used for passenger transport either in the form of ride-sharing/ taxi services or for personal mobility as well as for cargo transport to fulfill last-mile deliveries.
Several factors highlight the growing focus on microcars that cover the gamut from Kei cars, A00 vehicles, and quadricycles to neighborhood electric vehicles (NEVs) and low-speed vehicles (LSVs).
For a start, scarce parking is a reality in urban settings. Several cities exempt quadricycles from parking and congestion charges as they can be parked in traverse and lateral positions and occupy less parking space than A-segment vehicles. In fact, some new entrants are even exploring the possibility of contractable chassis for quadricycles, allowing them to be squeezed even more and occupy even less parking space.
Microcars are also underlining their credentials as a sustainable, effective, and low carbon footprint transport solution that can fulfill increasing last-mile deliveries in congested urban environments. Smaller size translates into a smaller turning circle radius for microcars. In turn, this means easy maneuverability in heavy traffic, narrow roads, and congested areas. It is thus ideal for solving last-mile delivery challenges in cities.
In addition to cargo transport, passenger mobility represents another promising growth area. Ride-sharing companies like Uber, Free2Move and Lyft are exploring the potential of ride experiences in microcars to combat intensifying traffic and address changing customer needs.
Due to ease of use, microcars are a popular option for women, the elderly and young people. In certain countries, quadricycle licenses are given at the age of 16 years, whereas the minimum age to acquire a driver’s license for a regular vehicle is 18 years. This underlines the rising attraction of quadricycles among a younger customer cohort.
Microcars also offer cost advantages over A-segment vehicles since they have lower maintenance and purchase costs. In addition, smaller engine and body specifications means they are more fuel-efficient than A-segment alternatives.
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Bumps on the way
There are several challenges that loom ahead. Rapid advances in vehicle electrification will blur differences between microcars and the A00 segment. The progressive dropping of electric A-segment vehicle prices will nullify the advantage of price attractiveness that microcars now possess.
The limited range and power of microcars restricts their use. This could disincentivize customers from purchasing them. The emergence of new alternatives, whether urban air mobility or drone delivery, could cannibalize revenues from microcars since they target the same application area viz shared mobility.
Although government backed non-fiscal incentives are expected to persist, the phasing out of fiscal support in mature markets will hurt the adoption of new electric microcars.
Grabbing growth opportunities
Stakeholders should target fleet operators, mobility as a service (MaaS) providers, and other mobility companies, encouraging them to shift towards electric microcar fleets. Such fleets could address the increasing demand for emission-free mobility solutions in cities.
In turn, shared mobility and micromobility companies should leverage microcars for a range of applications, including urban taxi and delivery services. Offering such services at competitive prices will create new revenue streams, while attracting customer interest. Electric microcar fleets should also be marketed to corporates as part of their employee car program, citing the benefits of lower budget and maintenance costs for the company.
In addition to fleets, mobility companies and OEMs should incorporate safety and connectivity features into electric microcars with the aim of attracting a younger customer cohort.
With inputs from Amrita Shetty – Senior Manager, Communications & Content, Mobility
