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A small Chinese startup wants to jumpstart a global EV taxi revolution

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5 months ago

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On a recent morning in an industrial zone near Hong Kong’s bustling cargo port, a white MG electric taxi glided into a narrow kiosk resembling a car wash. A hydraulic lift elevated the vehicle, allowing a guided mechanical system to slide out the taxi’s depleted battery and replace it with a fully charged one. There was no plugging in, no waiting around to recharge. The taxi was ready for the road in under three minutes. 

That battery-swapping kiosk is the first of a network of hundreds planned for Hong Kong by U Power, a little-known startup from Shanghai that aims to electrify the beating heart of the city’s notoriously antiquated taxi fleet.  

The opportunity is huge. In Hong Kong, electric vehicles make up just 4% of the city’s 119,000 commercial vehicles, including taxis, buses, and delivery vans. For taxis, the percentage of EVs is even lower. As of December 2024, Hong Kong had only 90 electric taxis, accounting for 0.5% of the city’s 18,163 licensed cabs. That’s a stark contrast to the 24% penetration rate among the city’s private auto fleet.

Hong Kong is representative of a global phenomenon: Of the more than 400 million commercial vehicles worldwide, fewer than 1% are electric. Even in cities with high EV penetration rates—including San Francisco, Oslo, and Amsterdam—electric taxis remain a rarity. 

In theory, Hong Kong’s taxi owners have strong financial incentives to make the switch. Electric motors, with fewer moving parts than internal combustion engines, are cheaper to run and maintain. Several recent studies suggest fuel costs for EVs are more than 70% lower than for gas-powered vehicles, translating to annual savings of about $10,000 per taxi. The Hong Kong government offers further inducements: it has waived first-time registration taxes for electric taxis and granted a 45,000 Hong Kong dollar (about $5,750) subsidy per vehicle to operators who switch from gas to electric. 

Still, owners and drivers are wary. For commercial vehicles, especially taxis, every minute of downtime means lost revenue. Conventional EV charging is far too slow for high-utilization fleets. Hong Kong has more than 11,000 public EV chargers, but only about 2,000 are quick or fast chargers, capable of restoring batteries to 80% in 30 to 60 minutes. The rest can take several hours to fully recharge a vehicle—time most drivers don’t have. 

Courtesy of U Power

As Li points out, the average taxi driver earns 200 Hong Kong dollars (about $25) per hour: “You ask them to sit idle for two hours? No way. That’s 400 [Hong Kong] dollars gone.” On top of that, many public charging stations impose hourly parking fees, further eroding the economic case for EVs. 

Battery swapping stations could eliminate that downtime—but only if U Power can build enough of them across the city and persuade drivers to embrace the model. The company hopes to have four stations in operation in Hong Kong by the end of this year and ultimately envisions a citywide network of more than 200. 

Beyond Hong Kong 

Hong Kong is a high-profile testbed, but Li has global ambitions. U Power has launched pilots in Singapore and Macau and is actively rolling out swap stations in Thailand, Mexico, Portugal, and Peru. Li sees Thailand and Mexico as particularly promising due to their large taxi fleets and high vehicle turnover. Bangkok, he notes, has 80,000 taxis; Mexico City has more than 100,000. 

In Thailand, U Power last year signed a strategic partnership with SAIC Motor–CP Co., a joint venture between one of China’s largest automakers and CP Group, Thailand’s largest conglomerate. The venture aims to integrate battery-swapping technology into MG taxis and ride-hailing vehicles. (Disclosure: Fortune’s owner, Chatchaval Jiaravanon, is a member of the family that controls the CP Group, and he is one of U Power’s largest investors.)

U Power has also formed a joint venture with SUSCO, a Thai oil and fuel retailer, to install kiosks at its network of 200 gas stations and teamed up with Japan’s Sumitomo Mitsui Auto Leasing & Service to deploy a fleet of swapping-compatible MGs in the island province of Phuket. 

And the company now says that it plans to move its operational headquarters from Shanghai to Bangkok in order to fuel its global expansion.

In Mexico, the company has partnered with fleet operator Vizeon New Energy to develop swap-compatible EV taxis, buses, and trucks, and install pilot swap stations in three major cities. Similar efforts are underway in Lisbon and Lima, where U Power is targeting midsize fleet operators and delivery platforms.

Notably, though, U Power has no plans to enter the world’s two largest markets: the U.S. and China. Li calls the U.S. an EV laggard, hampered by low urban density, fragmented infrastructure, and an unpredictable regulatory landscape for Chinese tech companies. He’s also ruled out the Chinese mainland due to fierce competition, entrenched EV incumbents, and a power grid so advanced that ultra-fast charging is widely available—making battery swapping largely unnecessary.

China’s largest cities are notable exceptions to the global dominance of gas-powered taxis. Electric vehicles account for more than 95% of the taxi fleet in Beijing, Shanghai, and Guangzhou. In Shenzhen, the sprawling metropolis just across the border from Hong Kong, authorities have mandated the conversion of the city’s entire taxi and bus fleets to electric vehicles as far back as 2018. 

A wild ride on the Nasdaq 

U Power’s plans for global expansion sparked one of the most explosive post-IPO rallies in Nasdaq history. When the company debuted in April 2023, shares shot up over 600% on opening day, triggering multiple trading halts. Retail traders piled in, lured by the promise of a disruptive Chinese EV infrastructure play. The stock, which trades under the moniker UCAR, peaked at $901 in June before speculative fervor collapsed. By year’s end shares had slumped to $18. Over the past 52 weeks, U Power’s share price has oscillated between $9.05 and $2.47, with day-to-day swings often exceeding 10%. The stock currently trades below $4.00, down more than 50% year-to-date. No major Wall Street analyst currently follows UCAR. 

U Power’s stock’s slump reflects investor skepticism about the feasibility of its “battery-as-a-service” model and frustration with its lackluster financials. Critics question whether a battery swap network—capital intensive, dependent on fleet adoption, and distributed across so many different markets—can scale profitably. The company, launched in 2013, remains unprofitable, posting a $7.7 million net loss on $6.08 million in revenue in 2024, according to documents filed with the U.S. Securities and Exchange Commission.

Li insists the company will break even in 2025 and triple profits in 2026, thanks to expanding fleet contracts and growing subscription revenue in Southeast Asia and Latin America.  

Owners and drivers, hearts and minds 

To realize Li’s grand visions, U Power must secure hundreds of viable swap sites in some of the world’s most crowded cities. That’s an especially daunting proposition in Hong Kong, where land is expensive, and each location will require zoning approvals, grid connectivity, and all-hours vehicle access. So far, U Power has identified just ten potential sites in the city. 

The bigger challenge may be cultural. Winning over Hong Kong’s 17 major taxi fleet owners and some 46,000 fiercely independent drivers means reshaping deep-seated habits and suspicions. U Power’s model requires operators to give up battery ownership, retrofit vehicles with the company’s proprietary UOTTA interface, and pay monthly subscription fees tied to battery use—terms that may not sit easily with a sector long allergic to centralized control. 

Li insists the economics will win out. By decoupling batteries from vehicles, he argues, taxi owners can reduce up-front costs by as much as 40%. U Power, meanwhile, assumes responsibility for charging logistics, battery health monitoring, and end-of-life recycling. As batteries degrade, they’re rotated into less demanding uses—like stationary energy storage—or recycled outright. 

To sweeten the deal, Li has floated a blockchain-based incentive system. Each battery contains a chip that logs usage, charging behavior, and wear. Drivers who follow optimal patterns—avoiding peak-hour swaps, returning batteries in good condition—can earn digital tokens redeemable for energy discounts or services. The goal: a transparent, self-regulating marketplace that reduces strain on the grid while rewarding smart usage. 

Isaac Lawrence—AFP via Getty Images

Whether Hong Kong’s notoriously unruly taxi sector will buy in remains to be seen. The city’s iconic red, green, and blue cabs—red for Hong Kong Island and Kowloon, green for the New Territories, and blue for Lantau—are instantly recognizable symbols of the city. They’re also famously idiosyncratic. Most drivers still accept cash only and have long attracted complaints of rude service, overcharging, and reckless driving. Reform efforts have repeatedly hit walls: A proposed fee hike in 1984 triggered citywide riots; drivers staged mass strikes in 1991 and 2008; and just this February, the drivers’ union threatened another unless the government cracked down on unlicensed ride-hailing services like Uber. 

At U Power’s Hong Kong launch ceremony in June, the chairman of the Hong Kong Taxi Drivers & Operators Association attended and signed a memorandum of understanding pledging to promote the adoption of the UOTTA system. Notably, though, no representatives of the Hong Kong Taxi Owners Association, which represents the interests of taxi license holders—and is generally considered the more politically powerful of the two major taxi unions—attended the event.  

Still, the symbolism of electrifying Hong Kong’s taxis is potent. In 2023, when the city’s stock exchange opened offices in New York and London, it marked the milestone with a cheeky global ad campaign featuring then-CEO Nicolas Aguzin rolling through Manhattan and Mayfair—not in a black limo, but in the back of a classic red Hong Kong cab. If Li Jia has his way, the next time one of those taxis makes an international cameo, it’ll be running on swappable power—a symbol not only of the city, but of the future of electric mobility. 



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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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