Grants for new electric taxis are being cut by 20%, the Department for Transport (DfT) has announced.
The Plug-in Taxi Grant (PiTG) will be worth £6,000 during the next financial year, down from £7,500 currently.
The DfT (DfT) said the reduction is part of Government policy to “target incentives where they have the most impact whilst delivering value for money for the taxpayer”.
Since its introduction in 2017, the PiTG has provided more than £50 million to support the purchase of more than 9,000 zero-emission cabs.
There were fears the scheme would not be extended beyond the 2023/24 financial year.
Steve McNamara, general secretary of the Licensed Taxi Drivers’ Association, said earlier this month it was “essential” the grants continue as removing them would bring the cost of a plug-in hybrid electric LEVC TX taxi bought on finance to as much as £110,000.
Technology and decarbonisation minister Anthony Browne said: “Taxis are a vital part of our transport network, so it’s great to be supporting our iconic black cab industry with further funding to help decarbonise their vehicles, part of this Government’s plan to back drivers.
“From Redbridge to White City, it’s now more likely than ever that your black cab will be green, with the majority of taxis sold in London now being electric.
“The grant has been a huge success so far, and I’m pleased our funding will be continued for another year to help cabbies make the switch to new vehicles.”
Since 2018, taxis licensed in London for the first time have been required to be capable of travelling minimum distances powered solely by electric batteries.
Transport for London figures show 56% of the 14,800 cabs licensed in the capital are in that category.
LEVC managing director Chris Allen said: “Today’s announcement is a positive signal to the taxi trade that the Government remains committed to supporting the electrification of our iconic industry, and provides important support for drivers for another 12 months.
“LEVC is continually innovating to deliver the latest in clean, accessible mobility solutions.
“We will continue to work with Government to deliver for drivers and passengers across the UK.”
Mr McNamara said: “London’s licensed taxi drivers are proud to be leading the way in adopting zero emission electric taxis.
“Our members have invested record sums in these clean, green vehicles and the PiTG has played a vital role in making this possible.
“Today’s announcement provides the certainty and support hard-working taxi drivers and fleets need to continue investing in the future of this important sector and delivering the high-quality, accessible service London’s iconic black cabs are known for, all while helping to clean up our air and working towards net zero.”