Taxi conversion concerns see older black cab vehicle owners facing up to drop in market value

The recent concerns around the long-term halting of the Euro V to Euro VI taxi conversion programme has left many London taxi fleet owners and drivers facing financial setbacks.

According to an article in TAXI Newspaper, this abrupt change has led to a significant drop in the market value of Euro V taxis. While Vito models are maintaining some value, TX4 models have seen a sharp decline.

Fleet operators in the capital who invested heavily in Euro V taxis, banking on the conversion programme to extend the operational life of their vehicles, are the most affected. These investments were intended to secure an additional three years of service, but they now find the resale value of these vehicles plummeting.

Conversely, Euro VI taxis are retaining their value well. According to the taxi fleet expert, in some cases, late-model Euro VI cabs are fetching prices close to those of early TXE models. The report questions the wisdom of continuing to operate older, diesel-dependent cabs, especially given the growing scarcity of parts for TX4s and the technical challenges associated with maintaining the rear-wheel steer function on Vitos.

This situation raises important considerations for the long-term strategy of fleet owners, particularly in light of strict vehicle regulations and evolving market conditions.

The taxi fleet expert said in TAXI Newspaper: “The fleet owners and drivers who took a gamble by paying high prices for Euro V cabs, planning on getting them converted and gaining the extra three years, are obviously the biggest losers here. However, even long-term Euro V owners will lose, as the residual value of their cabs has just crashed.

“Interestingly, the price of Euro VI cabs is holding firm, and I have seen examples of late cabs that have achieved prices not far short of what an early TXE would command. I still struggle with this. I get how an older driver or a fleet set up for diesel would want to keep running older cabs for as long as they can, but with the growing shortages of all parts for TX4s and the difficulties in keeping the rear wheel steer functioning on Vitos, this approach may not make the best long term business sense.”