The Government has extended the Plug-in Taxi Grant for a further year but at a reduced rate of £6,000 per vehicle.

The Plug-in Taxi Grant has provided more than £50m to support the purchase of over 9,000 zero-emission cabs

The grant currently provides up to £7,500 or £3,000, depending on the vehicle’s range, emissions and design, but was due to end on 31 March 2024.

The Department for Transport said the extended funding would provide certainty to those who are looking to make the switch to electric in the next year.

It added that the Government was “continuing to target incentives where they have the most impact whilst delivering value for money for the taxpayer, which is why a reduced grant level of £6,000 has been chosen to support the market as it matures further”.

Since its introduction in 2017, the Plug-in Taxi Grant has provided more than £50m to support the purchase of over 9,000 zero-emission cabs.

Technology and Decarbonisation Minister Anthony Browne said: “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.”

Supported by the grant, electric taxi sales overtook the number of diesel taxis sold in London in 2022, marking a milestone for the sector. Nationally, more than one in 10 (12%) taxis are now zero emission capable.

Chris Allen, managing director at electric taxi maker LEVC (London EV Company), said the announcement was “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”.

He added: “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.”

Mariusz Zabrocki, general manager at Freenow UK, also welcomed the extension.

“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.”