Falling number of London taxi drivers leads to LEVC losing more than £100m

LEVC is attempting to boost its net worth by £100m to combat the falling number of taxi drivers in central London and the expected further decline in its sales this year.

The Coventry-headquartered electric taxi maker, which is also known as London EV Company, is in the process of increasing the value of everything a company owns minus all its debts after losing more than £100m during 2023.

The business, which is owned by Chinese automotive giant Geely, which also owns Volvo and Lotus, has said its sales are being impacted by the gradual decline in the number of taxi drivers in central London.

LEVC said that inflation, high interest rates and fewer people passing ‘The Knowledge Test’ are contributing to the decline.

As a result, the business recently started a series of recapitalisation exercises in order to “repair” the decline in its net worth during 2023 and the further forecasted fall in 2024.

The first took place in May 2024 and was a hive up and debt to equity swap of £50m while a similar exercise totalling £25m took place in July. A final share allotment of £25m is scheduled for October.

LEVC said these three exercises will increase the group’s net worth by £100m and “will improve both the liquidity position and reduce the gearing percentage of the group”.

The group has warned that its key London market is expected to continue its gradual decline in driver numbers, with sales also likely to be impacted by the 20 per cent reduction in the Plug-in Taxi Grant from April 2024.

Newly-filed accounts with Companies House have also revealed that LEVC’s turnover declined from £136.3m to £129.1m in 2023 while it made a pre-tax loss of £104m, after also making a loss of £142.9m in 2022.

Its total sales reduced by 14 per cent to 2,356 vehicles as a result of a fall in sales of its electric vans but its taxi sales increased in the year to its highest level since 2019.

LEVC issues warning over future sales

A statement signed off by the board said: “Market conditions show a steady decline in driver numbers in LEVC’s central London market.

“This is in part driven by inflationary pressures on the drivers, high interest rates causing drivers to leave the profession rather than refinance and low numbers of new drivers completing ‘The Knowledge Test’.

“Funding for large London-based TX fleets continues to improve with many asset-based funders still focused on ‘green transport’ opportunities.

“Outside of London, the UK regional market remains stable, balanced against a continued strong uptake in Scotland driven by the local Energy Saving Trust grants available to provide 0 per cent financing options”.

In January 2023, minority investor Natixis SA injected an extra £57.6m into LEVC while it raised an additional £70m in October last year through Geely UK.

The latest accounts for Geely UK, also for 2023, show its turnover fell from £153.4m to £129.1m, while it made a pre-tax loss of £104.7m, down from a loss of £142.3m.

Geely has owned LEVC after rescuing it from administration in 2013, saving more than 100 jobs in a buyout deal worth £13m.