It was announced in May of this year, but it was only the first step on a long road. Cabify, in its strategic plan to electrify its fleet, raised its request to the European Investment Bank to obtain financing from third parties. Now the EIB has given its go-ahead and has approved 40 million euros for the Spanish unicorn.
The EIB, in fact, will only take over half of the project. The other 40 million will be borne by Cabify itself. Which, in the words of the founder of Cabify Juan de Antonio, they will come out entirely from their coffers. “We have sufficient resources,” she explained to the media.
The objective of these funds is to press the accelerator of the electrification of the Cabify fleet. Between now and 2025, the company has positioned itself as objective to have 100% of its vehicles, at least in Spain, under this umbrella. For the rest of their regions they expect to meet the target a couple of years later.
It is a difficult challenge, and for several reasons. The situation with the semiconductor crisis does not help to reach acceptable shares in the electric car market. At a higher price and with above-average delivery forecasts, Cabify will have a big challenge at this point. Also on the side of the charging stations, a point that the EIB has also pointed out as critical.
However, it will also be difficult from an internal point of view for Cabify. Of the almost 80 million euros that will be put into play, the first round will go to the electrification of the company’s own fleets. Almost 1,400 vehicles under the Vecttor umbrella –VTC company that the technology company integrated as its own in April 2019–.
Then will come the challenge of convincing the rest of the fleets, in this case external ones, to transform their vehicles. With an average life of two years in their active cars, according to Cabify data, they will have to try to pivot the third-party business model. There is no data on the status of Cabify’s external fleets. With 85% of Vecttor cars as Eco and 8.3% Eco, they suggest that it has the same structure, but worse. In other words, in external fleets there will be a lot of work that they are planning to articulate through incentives.
In fact, starting in January, Cabify will launch a tender to combine the efforts of manufacturers and fleets in the mission of having a zero emissions platform.
The EIB, on the side of the Cabify VTC model
It is an important week for the business model that lives under the umbrella of the VTC model. A system that go through a golden moment after the announcement of the General Advocate of the European Union about the situation in Barcelona.
According to Maciej Szpunar, General Advocate of the European Union, the regulations that affect the Metropolitan Area of Barcelona with the restriction of the activity and the number of VTC. According to the opinion of Szpunar, which is not binding, but relevant, the norm “violates the freedom of establishment”. The report, in fact, is reminiscent of the times of the CNMC’s positioning in favor of the VTC business. A position celebrated by Cabify and Uber, but which, nevertheless, they continue to take with caution.
The EIB also wants to give definitive support to the VTC models. According to Ricardo Mourinho, vice president of the EIB, “the VTC business model has competitive advantages, it helps to change transport models to more sustainable systems.” The way to articulate this support goes through financing.