The plug-in taxi grant, which has been extended until April 5, 2025, has been cut by £1,500 per electric vehicle (EV).

The new rate for operators is worth up to £6,000 off a new EV, with eligibility criteria yet to be updated by the Office for Zero Emission Vehicles (OZEV). 

Previously, the plug-in taxi grant (PiTG) offered a discount on the price of eligible taxis of up to a maximum of £7,500 or £3,000, depending on the vehicle’s range, emissions and design. One of the requirements was that the vehicle should be wheelchair accessible.

Under the scheme, eligible taxis were allocated into one of two categories based on their carbon emissions and zero-emission range.

Category 1 PiTG (up to £7,500) required a zero-emission range of 70 miles or more and emissions of less than 50g/km.

Category 2 PiTG (up to £3,000) was based on a zero-emission range of 10 to 69 miles and emissions of less than 50g/km.

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.”

Since its introduction in 2017, the grant has provided in excess of £50 million to support the purchase of more than 9,000 zero emission cabs.

More than half (54%) – some 8,299 of London’s licensed taxis – are now electric, with the number of electric taxis increasing by 24% in the past year alone.

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.”

The electric taxi market has grown rapidly since the grant’s introduction, with sales overtaking the number of diesel taxis sold in London in 2022, marking a milestone for the sector. Nationally, more than one in ten (12%) taxis are now zero emission capable.

Chris Allen, managing director of the London EV Company (LEVC), 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.”

The decision to extend the plug-in taxi grant, albeit at a reduced rate, comes amidst calls for the plug-in car grant to be reinstated to help drive EV sales in the private sector.