Should you go electric in 2022?

As we drive full throttle into 2022 there are plenty of opportunities and challenges ahead for taxi drivers to get to grips with. With the ban on the sale of new petrol and diesel cars now brought forward to 2030 and no new hybrid cars to be sold beyond 2035, many will be wondering whether now is the time to switch to electric.

With London expanding its Ultra Low-Emission Zone and many other cities looking to introduce Clean Air Zones during 2022, those with older high-emitting vehicles are feeling the squeeze. Add to that the fuel shortages at the end of 2021 and record pump prices and the future may not seem that bright. Although electric cars still remain more expensive to buy than traditional vehicles at present, there are some generous government grants on offer and plenty of other benefits to encourage you to make the transition.

In this article, we ask whether 2022 could be the year to electrify your business? We consider everything from the environmental benefits, the costs and ease of charging to the best electric vehicles currently on sale. So, if you’re stressing over your big decision then we’ve got you covered!

Whether you’re looking to buy an electric, hybrid or diesel taxi make sure to give the team at Taxi Insurer a call to discuss your taxi insurance needs.

Who else is going electric?

When looking at the current state of electric car up-take in the UK there’s good news and bad news. In terms of new vehicle sales, Wired magazine reports that in August 2021, fully-electric vehicles had a decent 10.9% share of the UK market, with plug-in hybrids at 7.4%, diesel at 7.5% and petrol at 43.3%. Meanwhile hybrid vehicles accounted for a combined 38.4%. So, in terms of new vehicle sales to the general public, electric is on a positive trajectory.

However, the story is slightly different when we look at taxis. In a recent investigation into the taxi fleets of the UK’s 25 largest cities, it was found that 53.74% of all taxis and PHVs are still diesel. And if you exclude the London fleet then that rises to a whopping 72.07%.

The good news is hybrid electric taxis have now overtaken petrol-fuelled ones. Giving them a firm hold on second place with 33.09% of all cabs.

This picture is only likely to improve over the next few years as some of the big taxi operators take the hint from government and the public and make the switch to fully-electric.

Addison Lee, the UK's biggest PHV firm, has announced a massive £160m investment and a partnership with Volkswagen in a bid to achieve an all-electric fleet by 2023. It plans to begin the switch by moving to the new Volkswagen ID 4 SUV, with 450 vehicles joining their PHV fleet. Addison Lee says the remainder of its 4,000-strong taxi fleet will move to electric at the rate of 200 fully electric vehicles every month.

Meanwhile, ride hailing businesses such as Uber are also making important moves in this area. For example, in a bid to make rides through its app 100% electric within the next 10 years, Uber has partnered with British electric vehicle company Arrival to create its own fleet of electric cars.

Environmental benefits

While taxis and PHVs only represent a small percentage of all cars registered in the UK, they are an important part of the UK environmental picture as they have a disproportionate impact on air quality. This is down to the fact that not only are they still predominantly diesel-fuelled, but they also achieve high mileage and are concentrated in urban areas with many pedestrians, such as around transport hubs and busy high streets.

So, would fully-electric cars be better for us and the environment? On the whole, yes. Electric cars produce no exhaust emissions so significantly reduce the amount of air pollution in built-up areas. Over the lifetime of an electric car, emissions are significantly lower than diesel or petrol cars because there’s also no need to produce and distribute fuel to them. Indeed, research from the European Environment Agency has found an electric car produces about 17-30% less emissions than petrol and diesel cars over their life cycle.

This is all great for air quality, but what about the emissions produced when building electric cars and generating the electricity to run them? Well, exactly how environmentally friendly they are to drive also depends on where the electricity used to fuel them comes from.

In 2020, the government calculates that renewables (mainly wind, solar, biomass, hydro) accounted for 43.2% of domestic energy generation in the UK. With 40.8% derived from fossil fuels and 16.1% from nuclear.

However, if you drove an electric car in a country like Norway, where almost all of the electricity produced within its borders is from renewables, then you would see even greater environmental benefits. So, while electric cars are already a great choice from an environmental perspective, they will only get better as the UK moves towards its net zero target.

In terms of building such cars, manufacturers are also trying to reduce their own emissions, using as much renewable energy as possible, and more sustainable materials and manufacturing processes. For example, Tesla hopes to produce many of its batteries at a solar powered ‘Gigafactory’ in Nevada. While its Model 3 interior is also 100% leather-free.

Access to Clean Air Zones

Bans on the sale of new petrol, diesel and hybrid cars won’t mean you are forced into buying an electric vehicle. After all, there aren’t currently plans to ban the sale of second-hand diesel and petrol cars. However, if you ply your trade around UK cities then there are some other laws you’ll need to consider.

There are plans afoot in many major cities to reduce their carbon footprint and clean up the air by introducing so-called Clean Air Zones. In these zones, drivers of older, more polluting vehicles will have to pay a fee in order to enter the zone. If you’re wondering where the UK’s new clean air zones are then read this recent Taxi Insurer article.

Some cities are thinking of going further and are even considering creating Low Emission Zones or Ultra Low Emission Zones with a total ban on polluting vehicles.

Recently, London extended its ULEZ to make it 18 times larger than previously. It now covers all the way to the North Circular Road (A406) and South Circular Road (A205). Fortunately, London-licensed taxis are exempt from ULEZ charges. But they are currently subject to a 15-year age limit. There are plans to reduce this to 12 years.

Increasingly, local councils are also bringing in restrictions on parking for petrol and diesel cars. For example, in Lancashire if you park a petrol or diesel car at any of the county’s on-street electric vehicle charging stations then you could be fined.

The costs conundrum

Finding out whether an electric car will be cheaper or more expensive in the long run than a petrol or diesel car is not an easy question for any prospective buyer to answer. While it seems that over a vehicle’s life an electric car will come out on top, there are several factors worth considering.

• Purchase price

Compared with their petrol and diesel brethren, electric cars can be relatively expensive to buy. Often thousands of pounds more than a comparable fossil fuel-powered version. But much of that extra cost is due to those expensive-to-produce batteries. So, once the cost of making those comes down (which it already is) then we should see a significant price reduction.

But while electric cars may not yet be able to compete with petrol and diesel models at retail price, there are some significant financial incentives to soften the blow to your pocket. These include:

• The Electric Vehicle Homecharge Scheme (EVHS). This provides up to £350 towards the cost of installing a home charger.
• Plug-in Taxi Grant programme. Taxi drivers can claim up to £7,500 off the price of a new purpose-built taxi such as the Dynamo Taxi and the LEVC TX. Taxi drivers who switch to the new electric vehicles could also save up to £2,800 on fuel every year.
• Plug-in Car Grant Programme. If your electric taxi costs less than £35,000 then the government has said it will pay for 35% of the purchase price, up to a maximum of £2,500.
• Exemption from road tax for all zero emissions vehicles. There was previously a £320 ‘expensive car supplement’ for vehicles costing over £40,000 but this has been scrapped for electric vehicles.
• Cleaner vehicle discount of 100% for the London Congestion Charge until 2025, as long as your taxi is fully electric.

While these grants used to be even more generous, there might be more incentives introduced in the future. For example, when the government announced the proposed 2030 ban on new petrol and diesel cars, it also announced £582m of grants to help drivers switch to electric.

It’s also worth contacting your local licensing authority to find out if there’s money available at the local level. For example, Bradford Council offers generous grants to help cover the running costs of electric taxis for the next two years.

• Servicing and repairs

Unlike almost all other consumer products, while electric cars cost more to buy it doesn’t mean they cost more to service and repair. This is due to the comparatively few moving parts and fewer items to wear out over time. It’s calculated that an electric car has around 200 moving parts compared to the thousands in a petrol or diesel car. That’s a lot less that can go wrong, which means lower repair costs and less time spent off the road being fixed!

You’ll still need to replace tyres, windscreen wipers, brake pads and other consumables every so often. But more expensive-to-replace items aren’t needed on electric cars so there’ll be plenty of savings there.

That said, it’s still important to sign up to a regular service plan. This will focus on ensuring the battery and electric drivetrain are working correctly. The charging cable will also be checked for damage, tears and performance, and the battery charge level checked. This is vital as battery performance can deteriorate over time.

The lifespan of electric car batteries has been one of the biggest concerns for would-be early adopters. However, many manufacturers have tried to put people’s fears to rest by offering generous warranties. For example, the Audi e-Tron, BMW i3 and Hyundai Ioniq 5 all offer 8-year battery warranties for up to 100,000 miles.

While Tesla boasts a ‘million mile’ battery. They promise that you’ll be able to drive a Tesla for at least a million miles before the battery can no longer function effectively. Indeed, the car battery could outlast the car itself and could even then be used in another vehicle.

Compared to petrol and diesel taxis, it does seem that servicing and other maintenance costs for electric taxis are very low. But just like having the right taxi insurance in place, you’ll always want to check that you’re getting what you paid for.

• Insurance

A common question you might be asking is, are electric taxis more expensive to insure than petrol or diesel taxis? Or even, will anyone insure my electric taxi?

Although cars like the popular Nissan Leaf are towards the lower end of the price spectrum and should be easy to insure, owners have in the past struggled to find reasonable insurance plans. Research from Auto Express found that a Hyundai Kona Electric cost £648 to insure a year, while a diesel-powered Kona cost £612.

But as electric cars are becoming increasingly commonplace, this gap is starting to narrow with more insurers entering the market and costs starting to come down. Here at Taxi Insurer, electric vehicles are becoming more accepted by our panel and as the year progresses it will improve further, no doubt. 

• Charging

With recent high petrol and diesel prices very much in our minds, as we head into 2022 a good way to protect yourself is to invest in an electric vehicle. But remember, the cost to charge can vary considerably depending on whether you’re using a home or public charger.

Whichever you choose it’s almost always cheaper than refuelling with petrol and diesel. But if you really want to save on cost then you’ll want to charge at home overnight when demand on the grid is low and electricity is cheaper.

Occasionally, public charging points can offer free charging. For example, ENGIE and Bromsgrove District Council recently announced a new electric vehicle rapid charge network which allows taxi drivers free charging for the first year. But you’ll usually need to pay. That said, there’s now a whole range of electric car charging companies looking for your custom.

On a final point, it’s important to be aware that there has been a recent increase in thefts of electric car charging cables. Indeed, some commentators have suggested it could be the next big crime wave to sweep the country in the wake of catalytic converter raids. Unfortunately, many of these stolen cables are finding their way on to online auction sites. Speak to the team at Taxi Insurer about how taxi insurance could protect you against theft. 

• Ease and speed of charging

As someone who drives for a living you’ve probably got enough to worry about without adding ‘range anxiety’ to the mix. But things have changed a lot in recent years. Ten years ago, there were just over 900 public charging locations in the UK, compared to almost 9,000 petrol stations. But that story has changed significantly and, as long as you plan ahead, you shouldn’t have to worry about whether a charge point is close at hand. Particularly if you’ve invested in one of the latest electric taxis boasting a decent 150-mile+ range.

Most now charge at a rate of 50kW and take about an hour to add 100 miles of range. Faster 150kW chargers are becoming more common and take about 15 minutes to that amount of range. While that’s still a lot longer than it would take to refuel a petrol or diesel taxi, there are plenty of ways you can minimise the impact on your business.

A driving experience popular with drivers and customers

An interesting case study from the Energy Saving Trust focusing on a taxi driver who has made the switch highlights the positive effects this can have on customer experience and your business. He found his customers were impressed with the vehicle’s environmental credentials and smooth, quiet ride. He says this has led to more new customers and more pre-bookings as customers appreciate the driving experience.

What to look for in an electric taxi

If you think that 2022 might be the best time to switch then you’ll soon be asking yourself, which model is best for my taxi business? Fortunately, there’s plenty to choose from as manufacturers have developed new models in response to government demands to reach net zero.

To help you narrow down the choice, we’ve put together a list of some of the things you should be looking for before parting with your hard-earned cash.

• Price
  Running a successful taxi business means you’ll always need to have an eye on the bottom line. There are some great deals to be had out there but you’ll always need to keep your budget firmly in mind.
• Taxi insurance
  Insurance costs can vary based on safety features, cost of replacement parts and repairs, and the vehicle’s cost. Speak to the experienced team at Taxi Insurer to get an accurate idea of what the taxi insurance costs will be for your business.
• Charging
  How long will it take to recharge the battery? Bigger batteries have a bigger range but usually take longer to charge.
• Range
  This is one of the most important considerations for taxi drivers who are behind the wheel all day. Be aware that the real-world range can often be less than that advertised.
• Reliability
  You’ll want to ask around to find out the tried-and-tested brands that other drivers swear by.
• Comfort and space
  Any taxi needs to have plenty of space for passengers and their luggage.

There’s such an array of cars to choose from, check out our list of the best new electric cars for taxi drivers . Could one of these be your hot new ride for 2022?

• Hyundai Ioniq Electric
  A classy looking hatchback designed for both smooth performance and efficiency.
• Nissan Leaf e-Plus
  Ever popular it’s affordable for many budgets with great reliability, low running and maintenance costs.
• Volkswagen ID-3
  Part of a new range of ID models from Volkswagen.
• Tesla Model 3
  As one of the most expensive electric cars on this list you’ll want adequate taxi insurance in place to protect your investment from theft or accident.
• Toyota Prius Mk 4
  One of the very best hybrids around.
• Peugeot e-2008 SUV
  This mid-sized SUV with funky styling has a whopping 434-litre boot capacity and a decent 155-mile range.
• Kia Soul EV
  Popular among taxi drivers it has excellent fuel economy, and a startling 280-mile range.
• MG ZS EV
  The new facelift model boosts the range to 273 miles.

Protecting your business with taxi insurance

Whether or not 2022 is the year you go electric, such decisions are a key part of success in the modern, competitive taxi industry. That’s why the specialist team at Taxi Insurer are always looking to come up with ways to help you stay ahead of the competition. For example, our interest-free payment plans are here to make your payments more manageable alongside other expenses.

Our taxi insurance comes in a wide variety of different forms, from third party, fire and theft to comprehensive cover. Public liability insurance and employers’ liability insurance can also be added.

Policyholders can also benefit from no claims bonus protection, a UK-based call centre, and a 24-hour claims management service.

Call today for a taxi insurance quote.