LAST CHANCE SALOON: Mayor of London now faces huge pressure to revive the capital’s taxi industry as EV support shrinks
Recent cuts to government support for electric taxis have coincided with a sharp decline in the number of licensed black cabs on the road. Industry observers and taxi advocates are now urging the Mayor of London to step in and bolster the trade through strong policies and support measures.
The forthcoming Taxi and Private Hire Action Plan from Transport for London (TfL) is widely seen as the pivotal opportunity to address these challenges and secure the future of the capital’s taxi fleet.
Declining Black Cab Numbers
The London black cab fleet has fallen significantly in recent years. Before the COVID-19 pandemic, the city had around 19,000 licensed taxis in service. Today that figure has dropped to roughly 14,500. This downturn is driven by multiple factors, including the pandemic’s impact and the retirement of older vehicles. In 2024 alone, an estimated 800 to 1,000 aging diesel taxis will reach the end of their licensed operating life. Unless, drivers are retained, new drivers come in and those vehicles reaching their age limits are replaced, the fleet will continue to shrink – a worrying trend for an industry that is both an iconic part of London’s identity and an essential component of the capital’s fully accessible transport network offering.
Reduced Government Support for Electric Taxis
At the same time, cab drivers face headwinds in transitioning to cleaner vehicles. The UK Government recently reduced the Plug-in Taxi Grant (PiTG) – the subsidy that helps cabbies purchase new electric taxis. From 6 April 2025, the grant for a new zero-emission taxi will drop from £6,000 to £4,000 per vehicle. This marks the second consecutive year that the grant’s value has been cut, following a previous reduction from £7,500 to £6,000. While the Government has extended the PiTG scheme for an additional year, the diminished financial support is causing concern among drivers and industry officials.
Sam Pooke, Senior Policy Manager at taxi app FREENOW, welcomed the extension of the grant but warned that the smaller subsidy could hinder cabbies looking to go electric. “It’s encouraging to see the Plug-in Grant extended, but disappointing to see its reduction for a second year in a row from £6,000 to £4,000 per vehicle,” said Pooke. The cut in funding comes at a time when many drivers are already struggling with the high upfront costs of switching to electric cabs. Without sufficient support, there is a real risk that the transition to greener taxis will slow down, undermining London’s air quality goals and the Mayor’s ambition for a zero-emission taxi fleet.
Financial Burden on Drivers Switching to EVs
For cab drivers, investing in a new electric taxi is a major financial commitment. The only new taxi model currently available for London licensing – the LEVC TX – comes with a hefty price tag of around £73,000. This cost is prohibitive for many, and 94% of black cab drivers report being financially impacted by the expense of vehicles. Even with the existing grants and incentives, the out-of-pocket cost for an electric cab can far exceed what drivers had to pay for older diesel models.
Operators point out that the reduced PiTG support intensifies this burden. Every £1,000 of grant funding can make a difference in a driver’s ability to afford monthly finance payments on a new taxi. With the grant shrinking, drivers may delay upgrading, opting to keep older, more polluting cabs on the road for longer, or worst case scenario, even leave the industry altogether.
Another factor is the broader ecosystem needed for electrification. Beyond vehicle purchase costs, cabbies need reliable rapid charging infrastructure to keep their electric taxis running efficiently. Progress has been made – over half of London’s licensed taxis are now zero-emission capable models – but sustaining this momentum requires confidence that going electric is financially viable in the long term. Drivers have called for additional measures such as VAT exemptions on new taxis and more generous vehicle scrappage schemes, which would alleviate some of the cost pressure. These ideas have been floated by industry groups and were echoed in a London Assembly motion urging the Mayor to introduce a taxi “delicensing” scheme to help drivers retire diesel cabs and afford new electric vehicles.
Calls for Strong Mayoral Support and Regulatory Backing
Facing these challenges, there is a growing consensus that the Mayor of London and TfL must play a stronger role in supporting the taxi trade. With direct government subsidies waning, City Hall’s policies and regulatory framework need to make the difference in revitalising the sector. Stakeholders are looking to the upcoming TfL Taxi and Private Hire Action Plan – expected to be published in the coming weeks – as a crucial blueprint for the industry’s future.
London Electric Vehicle Company (LEVC), the manufacturer of the TX electric taxi, underscored the importance of this forthcoming action plan. A spokesperson for LEVC commented that the strategy should establish a clear vision and concrete support for cab drivers. “We hope that the forthcoming Taxi and Private Hire Action Plan refresh, due to be published by TfL in the coming weeks, will set the longer-term regulatory direction and policy intention needed to secure and build a strong future for the taxi trade in London and in cities across the UK,” the LEVC spokesperson said. This sentiment is widely shared across the industry – from vehicle manufacturers to driver associations – all of whom seek assurance that the transition to electric taxis will be backed by robust policy.
Key areas where the Mayor’s action is deemed vital include: financial incentives or scrappage schemes for upgrading vehicles, improvements to the charging infrastructure, and regulatory tweaks to level the playing field for black cabs. For instance, giving taxis greater access to bus lanes or high-traffic areas could help drivers maintain earnings while using cleaner vehicles, offsetting some of the costs of conversion. Additionally, accelerating the recruitment and training of new taxi drivers (for example, by modernising the Knowledge of London exam process) is seen as necessary to boost driver numbers and meet passenger demand. These measures would require strong mayoral backing and close coordination with the taxi industry.
A Crucial Moment for London’s Taxi Trade
London’s taxi industry now finds itself at a pivotal moment after a long period of decline. The combination of a shrinking cab fleet, rising costs for electric vehicles, and reduced national subsidies has created an urgent need for decisive action at the city level. The Mayor of London, through TfL, has an opportunity to address these issues in the upcoming Taxi and Private Hire Action Plan. Stakeholders are not calling for emergency bailouts, but rather for a clear and supportive roadmap that will restore confidence to drivers and ensure that the black cab remains a viable and sustainable profession.
By reinforcing the transition to zero-emission taxis with appropriate incentives and regulations, the Mayor can help reverse the decline in cab numbers while advancing environmental goals. London’s black cabs have long been a symbol of the city; with the right support, they can also be a symbol of its commitment to clean, accessible transportation. The coming weeks will be telling, as the industry awaits the details of the action plan. All eyes are on City Hall to see if it will deliver on the backing needed to revive and future-proof London’s taxi trade in the wake of reduced central government support.
