Electric Plug-in Taxi Grant worth £7,500 set to end in less than three months

Image credit: Mark Twyman

The fate of the taxi industry's shift to greener, Zero Emission Capable (ZEC) vehicles could be handed a huge blow, as taxi drivers in England face a potential additional burden of £7,500. This looming financial challenge comes as the Government's Plug-in Taxi Grant (PiTG) scheme, a crucial lifeline for many, is set to expire in less than three months with no confirmation of an extension.

Introduced to support the uptake of purpose-built ZEC taxis, the PiTG has been instrumental in bridging the cost gap between traditional internal combustion engine taxis and their ultra-low emission counterparts. The scheme, which was extended in 2022 to run until at least the 2023/24 financial year, offers substantial discounts of up to £7,500 or £3,000 on eligible new electric taxis.

However, despite the success of the scheme in promoting a cleaner, more sustainable taxi fleet, there have been no public discussions about extending the PiTG beyond April 2024. This uncertainty has raised significant concerns among taxi drivers and fleet owners, given the high costs of electric vehicles.

The Mayor of London, Sadiq Khan, has confirmed dialogue between Transport for London (TfL), the Office for Zero Emission Vehicles (OZEV), and the Financial Secretary to the Treasury regarding the extension of the PiTG. Khan emphasised the importance of the grant in overcoming the primary financial barrier faced by taxi drivers in transitioning to ZEC vehicles.

Currently, the PiTG categorises eligible taxis into two groups based on their emission levels and zero-emission range. The LEVC TX, a popular electric taxi model, falls within Category 1, eligible for the maximum £7,500 grant.

As the deadline approaches, the taxi industry faces a critical juncture. Without an extension of the PiTG, many cabbies, already grappling with high finance and vehicle costs, could be saddled with an additional £7,500 expense. This situation underscores the need for continued support and clear policy direction in the transition towards a more sustainable urban transport system.

The Mayor of London, Sadiq Khan, said: “The financial support the Plug-in Taxi Grant (PiTG) provides addresses the main barrier taxi drivers face in moving to a zero emission capable (ZEC) vehicle. TfL has been in contact with the OZEV regarding the Plug-in Taxi Grant (PiTG) expiring at the end of the current financial year and are continuing to engage with them with the aim of ensuring London’s taxi drivers continue to get the support they need to move to ZEC vehicles.

“TfL’s Commissioner recently wrote to the Financial Secretary to the Treasury about a number of measures to support London’s taxi and private hire vehicle industries in moving to electric and ZEC vehicles.  

“This letter expressed taxi stakeholders’ significant concerns about the potential withdrawal of the PiTG at the end of the current financial year. TfL would like the grant to remain in place given its success, to date, in incentivising the switch to cleaner, ZEC vehicles in line with current vehicle licensing requirements set by TfL.”