Table of Contents
How Will This Impact Taxi and Private Hire Drivers?
Why is TfL Making This Change?
What Should Taxi Drivers do who Drive an EV?
From December 2025, the rules for the London Congestion Charge will start to change. These changes are important for taxi and private hire drivers who work in and around the congestion charging zone, especially if you already drive an electric vehicle (EV) or are thinking about transitioning to cleaner vehicles. Right now, drivers of electric cars, battery electric vehicles or even hydrogen fuel cell vehicles can enjoy the cleaner vehicle discount. For some, this has meant a 100% discount, allowing them to enter the zone without paying the standard daily charge.
But this exemption is coming to an end…
From 2 January 2026, the daily congestion charge will increase:
- From £15 to £18 per day, on the day of travel or in advance.
- From £17.50 to £21 if paid within 3 days after travel.
Electric car drivers will no longer be fully exempt. Instead, EVs will receive a 25% discount, but only if they register with Transport for London (TfL) Auto Pay. This change is part of TfL’s plan to ensure the scheme stays fit for purpose as more people switch to cleaner vehicles. For taxi and PHV drivers who work daily in central London, understanding these changes early can make a real difference to your future running costs.
What Exactly is Changing?
Here are the main updates all drivers should be aware of:
- The daily Congestion Charge increases from £15 to £18
- This new daily rate begins in January 2026.
- The “Cleaner Vehicle Discount” ends for many EVs.
- The old 100% discount available to EVs will no longer apply. Instead, eligible EVs will receive a 25% discount, reducing the daily charge from £18 to £13.50.
- Electric vehicles must be registered to TFL’s Auto-pay to receive the discount
- The discount only applies if your EV is registered for Auto Pay. If not, you’ll pay the full £18.
- Vans, HGVs and quadricycles powered by electric technology may qualify for different discount rates, though most will still see an increase in cost.
- Car club vehicles operating EV fleets will also lose automatic full exemption.
TfL has explained that the congestion charge is no longer just about emissions. As more drivers adopt cleaner vehicles, the zone becomes busier. Without updating the rules, TfL estimates that thousands more vehicles could enter the congestion charge zone on an average weekday next year, reducing the scheme’s effectiveness.
How Will This Impact Taxi and Private Hire Drivers?
1. Higher daily operating costs
If you work regularly in central London, this change will likely increase your annual expenses. For example:
- EV taxi entering the zone 20 days/month:
- £13.50 × 20 = £270/month
- £270 × 12 = £3,240/year
Previously, this could have cost £0 if you received a full discount.
2. Lower savings gap between EVs and petrol/diesel
Until now, many taxi drivers switched to electric vehicles because:
- Lower fuel costs
- Fewer moving parts (cheaper maintenance)
- Full congestion charge exemption
With the exemption ending, the value difference becomes smaller. EVs still save money compared to paying the full £18 daily fee, but the overall financial benefit may shrink.
3. Impact on fare pricing
Some drivers may adjust fares to cover rising operating costs. Others may increase working hours or focus more on jobs outside the zone.
4. Investment reconsiderations
If you’re planning to upgrade soon, it’s worth rechecking the financials. Vehicles that once paid £0 per day will now pay thousands per year if they work in the zone often.
Why is TfL Making This Change?
TfL says the update is needed to keep congestion under control and ensure the system remains effective as technology evolves. The original discount encouraged drivers to transition to cleaner vehicles, which helped London’s air quality improve. But now that many people have already made this switch, the exemption affects how well the charge prevents unnecessary traffic. In short, the new rules aim to:
- Manage traffic levels
- Keep public transport moving
- Ensure fair charging
- Prevent EV exemptions from overcrowding the zone
What should taxi drivers do who drive an EV?
- Register your vehicle for Auto Pay
This ensures you get the 25% EV congestion charge discount.
- Review your working patterns
If you often drive within the congestion charging zone, consider whether route adjustments could reduce your cost.
- Recalculate your vehicle costs
Factor in:
- Purchase or finance cost
- Charging or fuel cost
- Maintenance
- Congestion charge
- ULEZ impact (if relevant)
This can help you decide whether a petrol hybrid, diesel, or EV still suits your work best.
- Stay updated on future changes
TfL has suggested that more updates may come as more people adopt cleaner vehicles.
Final thoughts
For taxi and private-hire drivers, these updates to the EV congestion charge mean your daily running costs may rise, especially if you work regularly in central London. EVs will still offer some savings, but the shift from a 100% discount to a 25% discount changes the financial picture. Understanding the rules now will help you stay profitable, plan ahead, and make the right decisions for your vehicle and your business. Acorn Insurance arranges cover, from 7 day to annual and covers you for multiple jobs, from private hire and public taxi taxi to courier work and food delivery. Click here to get a taxi insurance quote today with Acorn Insurance.