Dundee could be in line for a £36 million grant towards low emission vehicles.
The cash would pay for the infrastructure for electric cars, including charging points.
If successful, the council will also distribute funds to other Scottish cities, such as Aberdeen, Glasgow, Edinburgh and Stirling.
Chris Elder, taxi branch secretary of Unite union, said he had been made aware of a feasibility study that had been carried out by the city council prior to applying for the grant.
He said: “They have now applied for the grant.
“As far as I am aware, the council will hear in around six to eight weeks from now if they have been successful.
“If the council gets the £36 million, £2.2 million will be set aside for the taxi trade.
“This will be £4,000 per car operator, but only electric wheelchair accessible taxis will get this funding.”
He said it would take the form of a oneoff payment available for five years.
However, most of the money would be spent on the city council’s own fleet of vehicles.
Mr Elder said: “The qualifying cars cost between £27,000 and £40,000 — well out of the reach of your average taxi driver in Dundee,” said Mr Elder.
Taxi drivers have already expressed concern that rolling electric taxis out throughout Dundee could result in drivers being put out of work, said Mr Elder.
He said: “Power points in other cities would help.”
Craig Melville, convener of Dundee City Council’s environment committee confirmed the council had applied for the grant.
He said: “We are excited about the proposals made in our OLEV bid.
“This builds on a considerable amount of work that has already gone into supporting the use of low emission vehicles in the city.
“The council is leading the charge by using 62 in its own fleet.
“We are also encouraging and supporting the use of electric vehicles across the city with the installation of the infrastructure for charging vehicles.
“There are currently 69 charging points spread across Dundee.
“Increased use of low and ultra low emission vehicles will help us to tackle air quality and other environmental issues faced by Dundee and other major cities.
“We are looking forward to finding out the decision later in the year.”