Decline in London taxi driver numbers hits black cab manufacturer LEVC amid market challenges
Updated: Aug 22
London EV Company (LEVC) revealed declining taxi driver numbers in London are having a negative impact on the black cab manufacturer.
In papers filed with Companies House, market analysis shows a steady reduction in drivers within LEVC's central London stronghold. The factors driving this decline include the ongoing pressure of inflation on drivers, high interest rates dissuading many from refinancing, and a decreasing number of new drivers completing the rigorous "Knowledge Test".
Despite these challenges in the capital, there are positive signs outside London. The regional UK market remains stable, with Scotland seeing particularly strong uptake, thanks to Energy Saving Trust grants offering 0% financing options for taxi drivers.
In 2023, LEVC saw a dip in total sales to 2,024 units, marking a 14% decline compared to the previous year. This reduction was primarily linked to a drop in VN model sales. However, there was a silver lining with UK sales of the TX model reaching their highest levels since 2019. The rise in TX sales is attributed to diversifying into new markets, including patient transfers, school transport for children with mobility needs, and tourist mobility services.
LEVC's commercial strategy was said to have remained focused on the growing demand for environmentally friendly transport, driven by government policies aimed at reducing emissions. Although demand for the TX model remained robust, the company responded to the decline in VN sales by enhancing financing options for fleet customers and adjusting warranty pricing and discount structures.
In terms of financial health, LEVC made strategic moves to bolster its position. Two major capital injections from Natixis SA and Geely UK Limited strengthened its financial footing. A further £100 million recapitalisation is planned for 2024, aimed at addressing declining net worth and improving liquidity.
However, the financial landscape remains challenging. LEVC reported a 5.2% drop in revenue to £129.2 million from £153.4 million.
