TAXI FUNDING CRISIS: Autumn Budget fails to extend £6,000 Plug-in Taxi Grant past April 2025
Updated: Oct 31
The Chancellor’s Autumn Budget, delivered by Rachel Reeves, has sparked mixed reactions across the UK’s taxi industry. While the decision to freeze fuel duty and invest in tackling the pothole crisis is welcome news for drivers, a critical issue remains unresolved: the future of funding for electric taxis.
The Plug-in Taxi Grant (PiTG), a government initiative aimed at supporting the transition to electric vehicles, has been at the heart of the industry’s concerns. Introduced to encourage the uptake of zero-emission taxis, the grant provides financial assistance to drivers purchasing electric taxis. However, recent reductions in the PiTG and the absence of a long-term extension are raising alarm bells for the industry, as it grapples with the growing challenges of driver retention and vehicle affordability.
Currently, the Plug-in Taxi Grant offers drivers up to £6,000 towards the purchase of a new electric taxi. This support is crucial, as the initial cost of electric taxis often far exceeds that of conventional vehicles. For example, a fully electric taxi, such as the LEVC TX, can cost around £65,000, making the grant a vital financial cushion for drivers looking to transition to greener vehicles.
Today’s lack of detail about extending the grant past April 2025 has further exacerbated concerns. Industry leaders fear this will put the UK’s efforts to improve air quality and meet its net-zero targets at risk, as fewer drivers can afford to make the transition without continued financial support.
Sam Pooke, Senior Public Affairs Manager at FREENOW UK, voiced the industry’s frustrations, stating that the lack of further support could have serious consequences. Poole said: "Following the Autumn Budget, it is encouraging to see the Government commit to freezing fuel duty next year and boost investment in tackling the pothole crisis to improve the UK’s road network.
“However, we are deeply concerned that the government has not taken the opportunity to provide the much-needed support for the taxi sector. With ongoing challenges such as driver retention and vehicle affordability, the absence of measures like extending the Plug-in Taxi Grant (PiTG) to March 2026 puts our industry at risk.
“The recent reduction in the grant has already slowed the transition to zero-emission vehicles, which is vital for improving air quality and achieving our net-zero targets. Without continued support, we fear that more drivers will leave the industry, further putting the taxi sector at risk.
“We also reiterate our call for an extension of the VAT exemption for adapted motor vehicles to taxis. This would recognise the critical role taxis play in providing accessible, door-to-door transport for individuals with disabilities, helping to keep fares affordable for all passengers.
“We urge the government to take proactive action and address these significant gaps, ensuring meaningful support for the taxi sector."
