Taxi drivers handed £6,000 boost as Plug-in Taxi Grant extended to 2025

Taxi image credit: LEVC

The UK Government has announced a significant boost for the green transformation of the nation's taxi fleet by extending the Plug-in Taxi Grant until 5 April 2025. The extension ensures that cab drivers can benefit from a £6,000 subsidy per vehicle, encouraging more to switch to electric taxis over the next year.

Introduced in 2017, the Plug-in Taxi Grant has already made a substantial impact, disbursing over £50 million to facilitate the purchase of more than 9,000 zero-emission cabs. This initiative has not only supported skilled jobs in the British car industry but also played a crucial role in reducing the carbon footprint of the taxi fleet.

The grant has significantly influenced the industry, with electric taxis now comprising over 54% of London's licensed taxi fleet. The last year alone saw a 24% increase in the number of electric taxis, as drivers have taken advantage of the Government funding to transition away from diesel vehicles. This surge in electric taxi adoption marks a notable shift, with electric taxi sales surpassing diesel in London for the first time in 2022.

Nationally, the shift towards sustainability is evident, with more than one in ten taxis now capable of zero emissions. This progress underscores the Government's commitment to targeting incentives effectively, ensuring they deliver both environmental benefits and value for money. The decision to set the grant at £6,000, reduced from the previous £7,500, reflects a strategy to support the maturing electric taxi market while maintaining fiscal responsibility.

Technology and Decarbonisation Minister, Anthony Browne, said: “Taxis are a vital part of our transport network, so it’s great to be supporting our iconic black cab industry with further funding to help decarbonise their vehicles, part of this government’s plan to back drivers.

“From Redbridge to White City, it’s now more likely than ever that your black cab will be green, with the majority of taxis sold in London now being electric. The grant has been a huge success so far, and I’m pleased our funding will be continued for another year to help cabbies make the switch to new vehicles.”

Chris Allen, Managing Director at London EV Company, said: “Today’s announcement is a positive signal to the taxi trade that the government remains committed to supporting the electrification of our iconic industry and provides important support for drivers for another 12 months.

“LEVC is continually innovating to deliver the latest in clean, accessible mobility solutions. We will continue to work with government to deliver for drivers and passengers across the UK.”

Steve McNamara, General Secretary of the Licensed Taxi Drivers' Association, said: “London’s licensed taxi drivers are proud to be leading the way in adopting zero emission electric taxis. Our members have invested record sums in these clean, green vehicles and the PiTG has played a vital role in making this possible.

“Today’s announcement provides the certainty and support hard working taxi drivers and fleets need to continue investing in the future of this important sector and delivering the high-quality, accessible service London’s iconic black cabs are known for, all whilst helping to clean up our air and working towards net zero.”

Mariusz Zabrocki, FREENOW General Manager, said: “We are delighted to see that the Government has now extended the Plug-in Taxi Grant until April 2025. The cost of EV taxis can be prohibitive for drivers and this grant can certainly support drivers to make the switch to EV.

“Over 70% of FREENOW taxi trips are done with EV black cabs. The transition to electric vehicles is a national effort and will require targeted support if we are to see a step-change in EV take-up. Affordable and equitable access to rapid EV charging continues to be one of the main challenges for taxi drivers, particularly in the city centre.

“FREENOW continues to 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. The combination of high energy costs and difficulty accessing off-street charge points keeps the costs of running an EV high for many drivers, and that is unfair.

“Across the UK, we continue to support our drivers to move to electric by offering higher earnings, financial support, and access to unique third-party partnerships to make the switch as simple and affordable as possible. However, we cannot do this alone. We need greater public and private sector collaboration to ensure investment is made where it’s required most – especially for our taxi driver community.”