Police believe an explosive device was brought to the taxi and have arrested four men in connection with the blast.
Police in northwest England have said they were treating a deadly blast outside a hospital in Liverpool as a "terrorist incident" involving a homemade bomb.
Russ Jackson, in charge of counter-terrorism policing in the region, said on Monday the motivation for Sunday's blast in a taxi was unclear but the device was "built by the passenger" who died.
He said the police believe an explosive device was brought to the taxi that burnt down after the explosion by the passenger who died in the incident.
“Remarkably, the taxi driver escaped from the cab, he’s being treated for injuries he sustained and is now released from hospital,” he said.
Jackson said the four men arrested will be interviewed by Counter Terrorism officers.
Three men aged 29, 26 and 21 were arrested on Sunday, and Jackson said on Monday another man aged 20 had been arrested.
He added that "significant items" had been found at one address while several other addresses had been or would be searched.
He said the passenger had boarded the taxi at a location in Liverpool and asked to be driven to the hospital, which was about a 10-minute drive away. The blast took place within the car as it approached the drop-off point in front of the hospital.
Britain raised its threat level from terrorism to severe from a previous level of substantial, meaning an attack is highly likely, following the taxi blast, Interior Minister Priti Patel said on Monday.
Merseyside police said they were called to the hospital at 10:59 am over an incident, and images showing a car on fire were largely shared on social media.