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TAXI BUDGET: Chancellor extends Fuel Duty cut, but sparks calls for greater EV support

Updated: Mar 7

Image credit: DALL.E (AI Generated)

In a recent budget announcement, the Chancellor confirmed the extension of the 5p cut in fuel duty, a move welcomed by the motoring and fleet sectors amidst the cost of living crisis. However, industry leaders are pressing for further measures to support the adoption of electric vehicles (EVs) and reduce operational costs for drivers.

Mariusz Zabrocki, General Manager of FREENOW, highlighted the financial pressures faced by taxi drivers due to high fuel, energy costs, and the challenges in accessing off-street EV charging points. Zabrocki welcomed the fuel duty freeze but reiterated the call for a reduction in the VAT on public charge points to 5%, aligning it with the rate for home charging to ensure fairness for all drivers.

FREENOW, which sees over 70% of its taxi trips made with EV black cabs, is advocating for enhanced public and private sector collaboration to support the taxi community's transition to electric and achieve sustainable transportation goals.

David Savage, Vice President, UK + Ireland at Geotab, echoed the sentiment, emphasising the significant impact of fuel duty on fleet and driver operating costs. With the looming 2035 deadline to end sales of internal combustion engine vehicles in the UK, Savage urged the government to introduce new incentives for EV adoption, including adjustments to VAT for public EV charging to make it more competitive with traditional fuel costs.

Despite the phased-out plug-in car grant and the upcoming Vehicle Excise Duty on EVs, industry figures are calling for decisive action to stimulate the EV market and meet the UK's 2050 net-zero ambitions.

The budget's fuel duty decision offers immediate relief, yet the call for broader, more robust support for electric vehicles highlights a critical crossroads in the UK's journey towards sustainable transportation.

FREENOW General Manager, Mariusz Zabrocki, said: “At FREENOW, we know taxi drivers are struggling with the costs of petrol and diesel but also with the high energy costs and difficulty accessing off-street charge points which keeps the costs of running an EV high while putting off those planning to make the move to EV.


“While we welcome the decision to extend the freeze to the fuel duty, once again we call for a reduction in the VAT levied against on-street charge-points to 5% so that it is at the same level as the rate applicable to home charging. It’s unfair that drivers have to pay higher VAT than private users.


“Over 70% of FREENOW taxi trips are done with EV black cabs and we continue to support taxi drivers to move to electric by offering access to unique third-party partnerships to make the switch to EV as affordable as possible. However, we cannot do this alone. We need greater public and private sector collaboration to ensure we continue to support the taxi driver community while supporting local and national sustainable goals.”

David Savage, Vice President, UK + Ireland, Geotab, said: “Fuel duty is one of the most significant contributors to operating costs for fleets and drivers—and against the backdrop of tightened purse strings and the broader cost of living crisis, a continuation of the freeze will be a welcome relief to the UK’s motoring and fleet community. 


“Fleets are under significant pressure to optimise operating costs and drive efficiencies wherever possible—and with fuel duty typically making up around a third of the overall cost at the pump, the scheduled 5p increase for later this month only risked exacerbating these pressures further. 


“We had hoped to see the government turn further attention to Electric Vehicle (EV) drivers, outlining new cost savings and incentives—particularly to help those who charge on the go by bringing VAT for public charging down. For those that rely on charging their EVs on public networks, the costs are often disproportionately much higher and increasingly even more expensive than refuelling traditional Internal Combustion Engine (ICE) vehicles. 


“Considering the scheduled transition date of 2035 to cease sales of ICE vehicles in the UK—together with the Zero Emission Mandate—vehicle manufacturers are under immense pressure to sell EVs through to their customers. Yet despite this, the government has terminated the plug-in car grant incentive scheme for EVs, and will introduce Vehicle Excise Duty (VED) next year.


“It’s important for the government to consider ways to stimulate the market and boost enthusiasm for EV adoption at scale. We hope the government will continue to consider new ways of incentivising the ‘switch’ to zero emission, ahead of its 2050 net zero ambitions.”


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