Under the Energy Saving Trust's (EST) Transport Energy Programme, almost £400,000 has been allocated, part of which will be used for two part-electric cabs.
Richard Tarboton, head of EST TransportEnergy, explained: 'We are working together with London's black cab industry to consider alternative fuels and vehicles. This is another step closer for the UK to lower CO2 emissions and improve urban air quality in line with our Kyoto commitments. We hope to see similar projects replicated across the country.'
The grant, which was funded by the Department for Transport, is part of EST's New Vehicle Technology Fund and a total of £388,000 was issued to London Taxis International (LTI) and hybrid vehicle provider Azure Dynamics.
David Deacon, chief operating officer at Azure Dynamics, said: 'We are currently collaborating with LTI on this project and aim to have a pre-production model completed this summer. We value the support and investment that EST have made to this project and look forward to its official trial and evaluation.'