From 2 January 2026, electric vehicles are no longer exempt from the London Congestion Charge. The long-standing 100% Cleaner Vehicle Discount has been replaced with a tiered system, alongside an increase in the standard daily charge from £15 to £18.
For London’s construction sector, this is not a theoretical policy tweak. It directly affects fleet operating costs, site logistics, pricing strategies and the business case that underpinned early adoption of electric vans across central London.
The critical question for contractors is no longer whether electric vans are environmentally preferable, that debate is settled. The real question is whether, under the new charging regime, electric vans still make operational and commercial sense for construction work in London.
For London’s construction sector, this is not a theoretical policy tweak. It directly affects fleet operating costs, site logistics, pricing strategies and the business case that underpinned early adoption of electric vans across central London.
The critical question for contractors is no longer whether electric vans are environmentally preferable, that debate is settled. The real question is whether, under the new charging regime, electric vans still make operational and commercial sense for construction work in London.
What Actually Changed in 2026 and Why It Matters
Under the revised Congestion Charge framework:
TfL has been explicit that the rationale is congestion, not emissions. By late 2025, over 112,000 vehicles were registered for the Cleaner Vehicle Discount. TfL modelling showed that retaining a full EV exemption would undermine congestion management by allowing thousands of additional vehicles into the zone each weekday.
For construction firms, the key implication is that electric vehicles are no longer treated as neutral road users. They still receive preferential pricing, but they now carry a visible, recurring access cost.
Under the revised Congestion Charge framework:
- The standard daily charge is now £18.
- Electric vans, HGVs and quadricycles receive a 50% discount (£9 per day) only if registered on Auto Pay.
- Electric cars receive a 25% discount (£13.50 per day).
- These discounts are time-limited and scheduled to halve again from March 2030.
TfL has been explicit that the rationale is congestion, not emissions. By late 2025, over 112,000 vehicles were registered for the Cleaner Vehicle Discount. TfL modelling showed that retaining a full EV exemption would undermine congestion management by allowing thousands of additional vehicles into the zone each weekday.
For construction firms, the key implication is that electric vehicles are no longer treated as neutral road users. They still receive preferential pricing, but they now carry a visible, recurring access cost.
The Immediate Cost Reality for Construction Fleets
For a construction company operating vans regularly inside the Congestion Charging Zone, the financial change is easy to quantify. An electric van entering the zone 20 working days per month now incurs approximately £180 per month, or £2,160 per year, in Congestion Charge costs that previously did not exist.
However, this needs to be assessed in context:
In pure running-cost terms, electric vans still outperform diesel equivalents for operators with regular London exposure. The change does not reverse the cost advantage, it reduces it. The real issue is not the £9 charge itself, but how it interacts with construction work patterns.
For a construction company operating vans regularly inside the Congestion Charging Zone, the financial change is easy to quantify. An electric van entering the zone 20 working days per month now incurs approximately £180 per month, or £2,160 per year, in Congestion Charge costs that previously did not exist.
However, this needs to be assessed in context:
- Diesel vans pay the full £18 per day.
- Diesel vans (old) remain subject to the £12.50 daily ULEZ charge across London.
- Electric vans remain fully exempt from ULEZ.
- Electric vans continue to benefit from lower fuel and maintenance costs.
In pure running-cost terms, electric vans still outperform diesel equivalents for operators with regular London exposure. The change does not reverse the cost advantage, it reduces it. The real issue is not the £9 charge itself, but how it interacts with construction work patterns.
Congestion Policy vs Construction Reality
From a construction perspective, congestion charging does not operate in a vacuum. It sits alongside practical constraints that are unique to site-based work.
Construction vans are not courier vehicles. They are often:
Electric vans introduce genuine operational trade-offs in this environment. Payload capacity is typically 15–25% lower than equivalent diesel models due to battery weight. Range is reduced further by heavy loads, winter heating and stop-start traffic. Charging opportunities during the working day are limited, as most construction sites do not provide EV infrastructure.
None of these issues are theoretical. They translate directly into lost productivity if not managed carefully. This is where the 2026 policy change becomes strategically important: once electric vans are no longer free to use in central London, the margin for inefficiency disappears.
From a construction perspective, congestion charging does not operate in a vacuum. It sits alongside practical constraints that are unique to site-based work.
Construction vans are not courier vehicles. They are often:
- Parked on or near sites for 8–10 hours.
- Loaded with tools, materials and consumables.
- Required to respond to unplanned issues and call-outs.
- Operating across multiple boroughs in a single day.
Electric vans introduce genuine operational trade-offs in this environment. Payload capacity is typically 15–25% lower than equivalent diesel models due to battery weight. Range is reduced further by heavy loads, winter heating and stop-start traffic. Charging opportunities during the working day are limited, as most construction sites do not provide EV infrastructure.
None of these issues are theoretical. They translate directly into lost productivity if not managed carefully. This is where the 2026 policy change becomes strategically important: once electric vans are no longer free to use in central London, the margin for inefficiency disappears.
Where Electric Vans Still Make Strong Sense
Despite the changes, electric vans remain highly effective in specific construction use cases.
They perform best where work is:
For these roles, the £9 daily charge is typically outweighed by ULEZ exemption, fuel savings and lower maintenance costs. In addition, many public-sector and commercial clients increasingly favour demonstrably low-emission delivery models when awarding work. In these contexts, electric vans remain commercially viable and, in some cases, strategically advantageous.
Despite the changes, electric vans remain highly effective in specific construction use cases.
They perform best where work is:
- Predominantly within central or inner London.
- Predictable and planned rather than reactive.
- Light to medium payload (electrical, plumbing, fit-out, finishing trades).
- Based around regular depot or home charging.
For these roles, the £9 daily charge is typically outweighed by ULEZ exemption, fuel savings and lower maintenance costs. In addition, many public-sector and commercial clients increasingly favour demonstrably low-emission delivery models when awarding work. In these contexts, electric vans remain commercially viable and, in some cases, strategically advantageous.
Where Electric Vans Become High-Risk
The analysis changes sharply for other construction activities.
Electric vans are a poor fit where work involves:
In these scenarios, range anxiety and charging downtime create hidden productivity losses. A single mid-day rapid charge can remove 30–45 minutes of working time. Repeating this across a fleet quickly erodes margins. For small contractors operating one to five vehicles, these risks are particularly acute. Lost hours cannot be easily absorbed and forced inefficiency can outweigh any headline savings.
The analysis changes sharply for other construction activities.
Electric vans are a poor fit where work involves:
- Heavy materials and consumables.
- Multi-site days across outer London and the Home Counties.
- Emergency or reactive call-outs.
- Unpredictable routing or late-day schedule changes.
In these scenarios, range anxiety and charging downtime create hidden productivity losses. A single mid-day rapid charge can remove 30–45 minutes of working time. Repeating this across a fleet quickly erodes margins. For small contractors operating one to five vehicles, these risks are particularly acute. Lost hours cannot be easily absorbed and forced inefficiency can outweigh any headline savings.
The Emerging Fleet Strategy
Across policy analysis, operational modelling and independent AI assessment, one conclusion consistently emerges: the future is not all-electric or all-diesel, but role-based fleets.
Leading construction firms are increasingly:
This approach allows firms to capture the remaining advantages of electric vans without forcing them into roles they are not yet suited to perform.
Across policy analysis, operational modelling and independent AI assessment, one conclusion consistently emerges: the future is not all-electric or all-diesel, but role-based fleets.
Leading construction firms are increasingly:
- Allocating electric vans to predictable, inner-London workstreams.
- Retaining compliant Euro 6 diesel or hybrid vehicles for heavy, long-range or emergency roles.
- Using scheduling, telematics and job batching to minimise chargeable entries.
- Treating Auto Pay registration as a compliance-critical fleet control, not an administrative afterthought.
This approach allows firms to capture the remaining advantages of electric vans without forcing them into roles they are not yet suited to perform.
What This Means for 2026 Bidding and Pricing
From a commercial perspective, the 2026 Congestion Charge changes will feed directly into tender pricing. Most contractors will not absorb the new costs indefinitely. They will be reflected in:
Clients should expect modest upward pressure on costs, particularly for work requiring frequent vehicle movements within the charging zone. Construction companies that can demonstrate efficient fleet deployment and controlled access costs will be better positioned to remain competitive.
From a commercial perspective, the 2026 Congestion Charge changes will feed directly into tender pricing. Most contractors will not absorb the new costs indefinitely. They will be reflected in:
- Preliminaries for central London projects.
- Day-rate assumptions for reactive works.
- Logistics and access allowances.
Clients should expect modest upward pressure on costs, particularly for work requiring frequent vehicle movements within the charging zone. Construction companies that can demonstrate efficient fleet deployment and controlled access costs will be better positioned to remain competitive.
Are Electric Vans Still Worth It?
Yes, but no longer by default.
Electric vans remain a viable and often cost-effective option for London construction companies in 2026. However, they are no longer a blanket solution. The removal of the 100% exemption marks a clear policy shift: road space, not tailpipe emissions, is now the primary regulatory concern.
The firms that succeed under the new regime will be those that align vehicle choice with job type, route profile and charging reality, not those that chase electrification as a headline target. In short, electric vans are still worth it in London construction, when used with precision.
Yes, but no longer by default.
Electric vans remain a viable and often cost-effective option for London construction companies in 2026. However, they are no longer a blanket solution. The removal of the 100% exemption marks a clear policy shift: road space, not tailpipe emissions, is now the primary regulatory concern.
The firms that succeed under the new regime will be those that align vehicle choice with job type, route profile and charging reality, not those that chase electrification as a headline target. In short, electric vans are still worth it in London construction, when used with precision.
Image © London Construction Magazine Limited
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
