Taxi drivers offered tax break to move to electric cabs

Taxi drivers offered tax break to move to electric cabs
Taxi drivers offered tax break to move to electric cabs

Taxi drivers are to be offered an exemption from higher rate car tax under new legislation to encourage them to take up low-emissions cabs.

Under the legislation, cabbies who opt for a zero-emissions capable taxi will be exempt from the premium rate of vehicle excise duty (VED).

Currently, any electric or hybrid vehicle which costs more than £40,000 is subject to the same premium tax applied to petrol and diesel cars in that price range.

That means a first-year tax bill of £320 for drivers switching to a zero-emissions capable cab such as the LEVC TX taxi.

Improving air quality

Announcing the move, Roads Minister Michael Ellis said that the aim was to improve urban air quality by speeding up the adoption of less-polluting vehicles through reducing costs.

The Roads Minister hopes the incentive will draw cabbies away from their diesel taxis. (Picture: Shutterstock)

He said: “Taxis are an iconic feature of our streets and by introducing financial incentives for the most environmentally friendly taxis and improving air quality in city centres, we are proudly putting our money where our mouth is.”

Read more: Nissan takes the ICE out of ice-cream vans with zero-emissions concept

Mr Ellis said the change, along with a £7,500 grant towards the price of zero-emissions-capable taxis would help move towards the Government’s ambition for net zero emissions by 2050.

Changing urban transport

The new rule has been welcomed by firms who are developing low or zero-emissions cabs.

LEVC has already sold around 2,500 of its hybrid TX taxis, which are powered by a zero-emissions electric motor backed up by a petrol range-exender. Next year it plans to introduce a cargo van based on the same platform.

LEVC is planning a cargo van based on its low-emissions cab

Joerg Hofmann, CEO of LEVC, said: “We are pleased to see Government exempting electric taxis from higher vehicle excise duty and continuing to back the taxi trade.

“Urban transport is changing rapidly but we agree that mobility must not come at the expense of air quality. Our taxi has been designed to meet current and future low emissions targets.”

Brendan O’Toole, managing director of Dynamo Motor Company which is set to launch the first all-electric taxi later this year, added: “This move will make it easier and more beneficial for drivers and fleet owners to go green and drive electric vehicles. To support this, we will be launching the world’s first fully electric, wheelchair accessible taxi in the autumn, which will not only be a greener choice for drivers, but a more cost-effective one too.”

Read more: A buyers’ guide to hybrids and electric vehicles

The Government announced at the same time that the first ultra-low emission heavy goods vehicles (HGVs) are now eligible for the Plug-in Van Grant

The British made Paneltex Z75 7.5-tonne truck and the BD Auto e-Ducato 4.25-tonne van are now be eligible for the grant. The first 200 eligible HGVs will benefit from a higher grant rate of up to £20,000 per vehicle.

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