A new West Midlands-developed electric taxi could spark a battle for control on the streets of London.

The Mercedes ‘eVito’ taxi – developed by a consortium including Lichfield drivetrain specialists Zytec and Coventry consultancy Penso – was hailed by regional minister Ian Austin, who said it could be a fixture in London in advance of the 2012 Olympics.

And it is set to make inroads into the competitive world of London taxis – a market traditionally dominated by Coventry’s Manganese Bronze.

In the two years since London’s Eco City Vehicles started selling taxis in the capital, it has picked up 30 per cent of the market – and the new electric vehicle could add to this percentage.

This comes at a time when Manganese Bronze, and its taxi-making subsidiary London Taxis International, has been suffering from a drop in sales.

It sold just 1,724 vehicles in the UK last year, a result it described as “soft”. And only 212 were sold abroad.

The company has since issued a profit warning for the upcoming yearly results.

The firm has been trying to respond to the first competition it has faced in the London taxi market. The company said last year it would be dropping the Eco City-owned dealership network.

Peter Da Costa, chief executive of Eco City, said: “Subject to successful trials, the eVito together with the already popular Vito taxi, provides London with a great opportunity to reduce air pollution with modern vehicles.

“We have taken on board Mayor Boris Johnson’s wish for a cleaner London and I’m confident this will contribute to meeting his goal.”

Speaking at the launch of the eVito in Lichfield, Mr Austin said the vehicle had great potential. He added: “The taxi cab is an iconic vehicle that makes personal transport accessible to all.

“It’s therefore highly appropriate that such a widely used mode of transport has become the first vehicle to incorporate this innovative ‘market-ready’ technology – which could potentially be introduced in time to serve the many thousands of tourists visiting the capital for the 2012 Olympics.”

Neil Cheeseman, the programme manager at Zytek Automotive, added: “The range and performance of the eVito make it perfect for inner city transport: not only does it deliver a significant reduction in carbon emissions but also significant costs savings which can be passed on to users in the form of reduced fares.

“The Zytek electric drive system used in the eVito taxi is suitable for a variety of passenger car and light commercial vehicle applications.

“Today’s demonstration highlights that the eVito taxi is both viable and relatively simple to put into production.”

The eVito taxi programme was part-funded by a £2.5 million grant from regional development agency Advantage West Midlands through the Advantage Niche Vehicle Research & Development Programme.