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London’s first congestion charge on zero-emission cars, higher charging prices on public roads and the introduction of new taxes will make it more expensive to run an electric vehicle than a petrol car for many private hire drivers in the capital.
Having pledged to make London the world’s first “EV-ready” global city, mayor Sir Sadiq Khan will introduce a congestion charge of £13.50 a day from January 2 for EVs, marking the first time the battery-powered cars will be hit with a fee.
This could cause up to three-quarters of EVs driven by private hire drivers to switch back to internal combustion engine vehicles within the next three years, according to forecasts by the consultancy Stonehaven.
The charge is still lower than the daily rate for other motorists, which is rising from £15 to £18 at the same time. But private hire drivers say EVs come with additional burdens since they are more expensive to buy than petrol models and public charging costs also remain high.
“It almost feels like a trap,” said Tania Naseer, a 34-year-old Uber driver and single mother of three children, adding that those who invested in going electric were being penalised.
Naseer, who drives an electric MG vehicle under Uber’s “rent-to-buy” scheme, said she would “definitely” switch to a combustion engine vehicle after the new charge comes into effect. “I’m here purely for financial gain,” she said.
The number of EVs registered in the capital has surged nearly sixfold to 116,000 since 2019, the year Transport for London started exempting EVs from the congestion charge. Thanks to the success of the discount as well as the expansion of charging infrastructure, EVs are expected to account for about a fifth of vehicles driving through the Congestion Charging Zone, which covers roughly eight square miles of central London, by the end of the year.
But transport experts and industry executives warn that the progress made in recent years could be sharply reversed just as the EV transition is shifting from early adopters and environmental enthusiasts to other drivers.
“EV adoption is still at a fragile stage and EV users already face huge hurdles in terms of public charging costs and accessibility,” warned Toby Poston, chief executive at the British Vehicle Rental & Leasing Association trade body.
Stonehaven’s forecast that three-quarters of EV private hire drivers could switch to petrol is based partly on polling conducted by Uber, which found half of its drivers were likely to immediately change if they had to pay the congestion charge.
The new charges could translate to an additional cost of more than £3,000 a year for those drivers entering central London five days a week.
According to TfL’s licensing data, about 60 per cent of London-licensed private hire vehicles were fully electric or zero-emission capable, as of August. There are more than 106,000 private hire drivers in the city.
“London’s assumption is that you can’t go backwards,” said Michael Dnes, a former official at the Department for Transport who now heads transport policy at Stonehaven.
“But there is going to be quite a significant change come the start of January when this congestion charge comes in because there are petrol vehicles that can just step in immediately to go and take the same passengers that would previously have been electric,” he added.
The appetite for EVs could be chilled further by chancellor Rachel Reeves’ plans to introduce a tax of 3p a mile from 2028. Similar schemes launched in New Zealand and Iceland in 2024 led to sales of EVs roughly halving.
From earlier this year, EVs are also required to pay vehicle excise duty for the first time — totalling £195 a year for cars costing less than £40,000 and £620 a year for those priced over.
To offset the blow to take-up of EVs, Reeves is planning to extend the UK’s electric car grant, offering a discount of up to £3,750, for another year with an extra £1.3bn in this week’s Budget and £200mn for charging infrastructure.
TfL has argued that the changes to the congestion charges “strike the right balance” between managing traffic and congestion within central London and supporting the transition to EVs.
It also said it did not expect “a slide back to non-EVs in the zone”, given it has planned since 2018 to end the 100 per cent Cleaner Vehicle Discount for EVs by the end of this year.
TfL added that professional drivers would “more easily” be able to recoup the charges since they were still lower than the fees for other vehicles.
But professional drivers of EVs say they face public charging rates that can be at least seven times higher than charging at home.
Over half of Londoners do not have home charging and are therefore paying at least £600 a year more. Private hire drivers can pay even higher costs since they need to use ultra rapid charging, which is 4p a mile more expensive than petrol, according to Stonehaven.
Dnes said one recharge during working hours for private drivers could cost up to £17 an hour, wiping out the discount on congestion charges for EVs, while leasing costs for EVs are also higher than petrol vehicles.
