Tesla's Model 3 Cars Chosen By Dubai Taxi Operator Amid Larger Clean Energy Push

Tesla Inc TSLA and Dubai-based taxi operator Arabia Taxi LLC entered into an exclusive agreement for the purchase of 269 Model 3 cars.

What Happened: The taxi company- a unit of Economic Group Holdings– will add 269 Tesla Model 3 vehicles to its Dubai taxi fleet in April 2023, the company said in a statement. The agreement is in line with Dubai’s vision to convert all taxis in Dubai to environmentally friendly vehicles by 2027.

Economic Group Holdings is owned by businessman Sheikh Majid bin Hamad Al Qasimi who is also the group’s Chairman.

The company claims to own the largest fleet of private taxi vehicles in the United Arab Emirates and has about 6000 taxi vehicles. 83 percent of the cars in the Dubai fleet are presently operating with environmentally friendly hybrid engine technology, the Chairman said in a statement.

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Al Qasimi said that the company said it is working on a plan to convert its remaining vehicles into EVs and is also looking into using hydrogen-powered vehicles in the future.

He said Economic Group Holdings is looking forward to "expanding cooperation" with the Elon Musk-led company and other EV manufacturers.

Why It Matters: The Tesla Model 3 was reportedly the first all-electric yellow taxi cab in New York City. After receiving approval to operate as a taxi in 2019, the first Model 3 taxi completed over 100 trips in its first week of service and was operated by DriveSally.

Taxi services have been striving to be increasingly electric. Ride-hailing platform Lyft is seeking to have a 100% electric fleet by 2030. Meanwhile, last month, Vingroup Chairman Pham Nhat Vuong announced the establishment of the Green and Smart Mobility Joint Stock Company (GSM) dedicated to using VinFast electric cars for rental and taxi services.

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