A coalition of more than 40 businesses including Uber, the AA, Royal Mail, Ocado, and Openreach has launched a significant challenge to London mayor Sadiq Khan’s plans to remove the congestion charge exemption for electric vehicles (EVs). The proposed changes would see a 20% increase in the congestion charge combined with a drastic reduction in the Cleaner Vehicle Discount, reducing the exemption for electric cars from 100% to just 25%, with electric van drivers facing a 50% discount. From Christmas 2025, electric vans are lined up to pay the full daily charge of £15, the same as petrol and diesel vehicles.

The businesses argue that this policy shift threatens to undermine London’s clean air ambitions and could derail progress towards the city’s net zero targets, particularly given that incentives like the current EV exemption have played a “crucial role” in accelerating the shift to greener transport. Clive Selley, CEO of Openreach, said the reduction in support could slow momentum just as EV adoption is accelerating, while Uber’s UK head, Andre Brem, highlighted how the exemption has helped establish London as a global leader in electrification. Similarly, Royal Mail – which operates the UK’s largest electric delivery fleet – and other major firms expressed concern that the increased costs, which could reach £13.50 per day for households and businesses, might deter investment in necessary EV charging infrastructure.

The timing of the proposed changes is particularly sensitive. Last year’s statistics indicate only 5.9% of new vans sold in London were electric, a figure considerably behind government targets aiming for 10% by the end of 2024. Given the rise in last-mile delivery demands, carbon emissions from vans in the capital have surged by 63% since 1990, in contrast to reductions in car emissions over the same period. Business groups warn that the charge risks discouraging the already sluggish uptake of electric vans, with additional annual operational costs potentially topping £5,500 per vehicle.

AA President Edmund King underscored concerns that reducing discounts on electric vans could backfire by negatively impacting London's air quality and the broader economy, urging a reassessment of the policy. Supporters of the exemption advocate for incentives to foster cleaner fleets rather than imposing financial barriers, especially at a moment when the city needs to accelerate the transition to zero-emission vehicles to meet its 2030 climate goals.

In response, London’s City Hall and Transport for London (TfL) have indicated they are working on ways to mitigate the impact of phasing out the exemption while continuing to encourage businesses to adopt cleaner vehicles. However, the business coalition remains firm in its call for the Mayor to scrap the plans, fearing that the removal of the congestion charge discount for electric vehicles could trigger a worrying “backslide to petrol and diesel” and hamper London’s status as a leader in environmental innovation.

The Mayor’s office has been approached for comment on the concerns raised.

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Source: Noah Wire Services