While electric private hire vehicles have enjoyed complete exemption from London’s Congestion Charge for years, this benefit will soon come to an end. Transport for London has announced significant changes to the Congestion Charge system, with the current 100% Cleaner Vehicle Discount terminating on December 25, 2025.
From January 2, 2026, all electric vehicles, including those used for private hire, will be required to pay the Congestion Charge. The new system introduces a tiered approach based on vehicle type. Electric cars used for private hire will be charged £13.50 daily, representing a 25% discount from the standard £18 fee that will apply from January 2026. Electric vans benefit from a more substantial 50% reduction, paying just £9 daily. Otto Car clients can benefit from automatic payment management that ensures they receive applicable discounts through the Auto Pay system.
These discounts, however, are only available to drivers registered with TfL’s Auto Pay system. For private hire drivers operating electric vehicles, these changes represent a significant shift in operating costs. Those working 20 days per month within the Congestion Charge Zone face monthly expenses of £270, amounting to £3,240 annually. TfL’s policy change aims to manage traffic levels more effectively while still supporting the transition to cleaner vehicles.
The financial impact is considerable compared to the current zero-cost arrangement. It’s important to note that while electric vehicles will now incur Congestion Charge fees, they remain fully exempt from the Ultra Low Emission Zone (ULEZ) charges indefinitely. The ULEZ scheme, which covers a broader area than the Congestion Charge Zone and aims to reduce air pollution, continues to charge £12.50 daily for non-compliant vehicles. PCO drivers should carefully plan their budgets to accommodate these new financial obligations while still maintaining profitability in their operations.
The charging period remains unchanged, operating from 7:00 to 22:00 daily. No charges apply during the Christmas period from December 25 to the New Year’s Day bank holiday. Drivers who miss payment can settle within three days for an increased rate of £21, up from the current £17.50.
Private hire operators should consider these upcoming changes when planning their fleet strategies, as the economic advantages of electric vehicles will be partially offset by the new Congestion Charge framework, though energy savings and ULEZ exemption continue to provide some financial benefits.
