Treasury has announced a tax exemption for those planning to switch to electric cars, will take effect from next month, a year early from the previously set date of April 2019.

The £1,550 incentive is an attempt by the government to clean up London’s air by encouraging cab owners to purchase electric cars over diesel ones.

Currently, cars costing over £40,000 have to pay a luxury car tax of £310 per year for five years. Once the changes come into play, cabs will save £400 monthly in fuel and will not pay the luxury car tax.

Black cab, which has 21,000 cabs in London, commended treasury for the move. This is because most black cabs cost over £45,000 meaning they currently pay the luxury car tax.   

According to Treasury one electric cab will help get rid of 7 tonnes of carbon dioxide a year.  

Treasury minister Robert Jenrick said, “Replacing just one of these taxis with a cleaner, electric version would rid the city of seven tonnes of carbon dioxide a year.

“Now, just think about what could happen if we upgraded them all to these greener, cleaner cabs.” The Evening Standard reported.

Chancellor Philip Hammond said, “We’re backing Britain’s black cab drivers to go green. This is a victory for the environment and new technologies, which I am determined to support as we build an economy fit for the future.

“Ensuring the air in our bustling towns and cities is free from pollution is part of our quest to become the first government to leave the environment in a better state than we found it.”

Chris Gubbey, the chief executive of cab manufacturer LEVC said his company would compensate drivers who had already ordered the vehicle before April. He said, “We will compensate these drivers to ensure that they are not penalised for being the first to make the transition to a cleaner vehicle.”

The scrapping of the excise duty will ensure Black cab have a fairer footing in the industry. However, other industry players like Uber will also enjoy better terms.

By Airport Pickups London