4p per mile not enough for electric company vehicles
Government incentives and cheaper fuel costs are among the benefits of electrifying your fleet early. But it turns out the advisory fuel rate (AFR) – i.e. the “45p per mile” electric expense alternative – doesn’t fit the bill, quite literally.
In September 2018, HMRC set out an AFR for pure electric cars of just 4 pence per mile. Sounds pretty low, right? Well, according to new research by TMC, it’s too low, and it’s actually short-changing electric drivers as a result.
Shortfall in expenses for EV drivers
As soon as the average fee for public charging is factored in, 4p per mile doesn’t cover the cost of charging any electric car.
(Apart from one – the Renault Twizy quadricycle. Probably not the most common of fleet vehicles that.)
The shortfall’s even bigger for pure electric vans too. Costs for the latest Renault Kangoo ZE alone can be covered by the 4ppm AFR – as long as you only charge it at home too.
All the other electric vans? It’ll cost you more than 4ppm to charge them – whether at home or not – and that’s without taking any wear and tear costs into consideration.
And in reality, domestic charging for larger EVs costs up to 65% more than the AFR for cars and as much as 165% more for vans.
Have you already adjusted your mileage rates?
The shortfall points to a glaring need for a higher standard AFR for electric vans and larger cars at the very least. In the meantime, it’s up to employers to work out a fairer rate for themselves. Have you adjusted yours?
Chief data officer at TMC, Paul Miers, said, “If employers want to encourage EV take-up in company fleets, they need to consider the actual cost per mile of using those cars and vans.
“Simply paying the current AFR of 4p per mile will leave company drivers out of pocket, particularly if they rely on the public charging network to be able to complete their journeys.”
More factors stopping fleets from electrifying?
The news comes as it’s revealed there’s a shortage of EV-specific replacement tyres on the market right now, with a relatively small range of choice for electric drivers. Thankfully, like for like replacements aren’t mandatory, but they’re recommended for good reason…
Electric vehicles require specially structured tyres to account for the additional weight of the battery on board. Despite that extra weight and the instant acceleration you get with an EV, the wear rate of their tyres tends to be lower.
EV tyres generally have better-rolling resistance which lengthens the distance the car can travel on the same tyre. Drivers get a better experience too, as the tyres have better decibel reduction, thanks to the lack of internal combustion engine in the vehicle.
Electric fleet drivers get a better, quieter cabin experience as a result.
Thankfully for those disappointed by the lack of replacements available, finding alternatives of the right size and load rating will do the job. But they won’t guarantee the best performance from the vehicle.
Is this a reason to delay electrifying your fleet? Drop a comment or email email@example.com and let us know where you’re at.