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The London Taxi Company will today open a £300m plant in Coventry to produce electric black cabs for the UK and international markets.

The government is spending £80m to support the project, which will go towards research and development at the site, help fund the installation of electric charging stations, and incentivising taxi drivers to buy the new, cleaner vehicles.

From January 2018 all black cabs sold in the UK must be able to drive using electric technology, in efforts to improve the air quality of major cities, particularly the capital.

Geely, the Chinese carmaker that owns Volvo, owns the London Taxi Company and plans to sell the cars from this September. The plant has a capacity of 20,000 vehicles a year. Geely today reported a record profit for 2016.

The group has longer term ambitions to export the vehicles to other cities around the world where the London black cab is recognised – though this will be dependent on trading conditions with Europe following Britain’s departure from the EU.

Executives from LTC have visited several European cities including Oslo, Amsterdam, Paris and Berlin to seek potential buyers for the cars.

Business secretary Greg Clark said:

Our iconic black cabs are famous across the world. The London Taxi Company’s impressive new factory and R&D facility showcases the innovation that makes the UK a world leader in the development of new automotive technologies.

Carl-Peter Forster, chairman of LTC, said the site is:

The first brand new automotive manufacturing facility in Britain for over a decade; the first dedicated electric vehicle factory in the UK; and the first major Chinese investment in UK automotive.

He added: “We are extremely proud of what we have achieved today.”

Replacing the existing UK taxi fleet will take many years, as the 38,000 taxis currently in operation in the UK only require replacing after around 15 years of service. Some 23,000 black cabs, which run on diesel, are in use in London.

The government is incentivising taxi drivers to buy the newer electric vehicles with a grant of £7,500 towards every new car – almost double the £4,500 offered to consumer motorists who choose to buy an electric vehicle.

This will cost the government £50m. A further £16.1m was given towards the development of the site in Ansty, Coventry, while the government will also provide £14m to ten cities including London, Birmingham and Coventry to help with the installation of electric charge points.

Copyright The Financial Times Limited 2017. All rights reserved.
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