ELECTRIC TAXI MARKET: Eco-system buoyant in London, but stalling elsewhere

A buoyant second-hand electric taxi market in London grows, but high demand could stall the electric revolution plans outside of the capital as a result.

The first purpose built electric taxis manufactured by LEVC rolled off the conveyer belt in January 2018. Most of the TX taxis driven out of Coventry’s LEVC Ansty plant made their way to London.

Since 2018 over 6,600 zero emission capable (ZEC) have been licensed, making the capital the fastest city in the UK to adapt to the new technology.

Five-years on and as PCP leasing deals expire, a growing number of vehicles are now making up a new second hand taxi market.

Historically many of the older London taxis would find their way outside of the M25 to carry on their working life as a licensed taxi. However, high demand for second-hand electric cabs could stall the natural nationwide eco-system for cabs.

For drivers and fleet owners who took the plunge early, the unit price of a LEVC TX was £55,000. Five years on and dealers are selling 2018 models for between £40,000-£42,000. That represents just a £15,000 depreciation in value over four- five years.

Yes of course dealers will pay less for a vehicle on part-exchange or at trade price, but the taxis are way above the balloon payment values for those that were bought in 2018. Many balloon payments sit at around the £17,000 based on a low initial deposit.

WHAT IS DRIVING THE HIGH SECOND-HAND VALUES?

Confidence in electric vehicles (EV) has grown since drivers first purchased the cab. Many have seen lower fuel costs, reduced maintenance bills and better reliability compared against diesel taxi counterparts.

Inflation has pushed the unit price of a new LEVC TX up to record high levels. Interest rates have also pushed the overall cost of a new vehicle up to over £90,000 in some cases depending on the deposit put down.

Extended warranties are swaying some drivers to keep their cabs freehold or by refinancing the balloon payment required.

There is also a huge demand from London rental firms for second-hand cabs which is in turn pushing up trade price. Deals offering to pay owners ‘silly money’ for cabs are circulating on a daily basis as fleet owners look to purchase enough cabs to satisfy their own growing demand from drivers.

Until the capital is ready to let go of more financially viable taxis, some UK cities will continue to struggle shifting to greener taxis.