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EV charging and reimbursement causing fleet headaches, says AFP

Electric vehicle adoption is fast picking up pace among fleets but operators are facing challenges when it comes to reimbursement and sorting charging, according to the Association of Fleet Professionals (AFP).

Reimbursement for electric miles is causing some headaches for fleets, according to the AFP

Speaking to Fleet World, AFP chair Paul Hollick added that EV take-up among fleets was going in the right direction but with just a few snags for early adopters.

“The big thing for fleets to be thinking about at the moment is reimbursement for electric miles, which is causing some headaches,” he outlined.

Although HMRC introduced an Advisory Fuel Rate (AFR) of 4 pence per mile from 1 September 2018 for business mileage completed in fully electric company cars – which ensures no taxable profit and no Class 1 National Insurance when employers pay this rate – Hollick said that the AER isn’t always covering the costs.

Employers can choose to use a different rate, but they will only avoid a taxable Benefit-in-Kind if they can actually demonstrate a higher electricity cost per mile for business travel. And Hollick said in reality most fleets are using AER as it’s simpler and easier, and also drivers are already saving a lot of money on the Benefit-in-Kind for an EV.

“Considering there’s low business miles being travelled in perk cars at the moment [due to lockdown], it’s not such a big issue at the moment but I think everyone is aware that it could be,” he continued.

Hollick also warned that another big issue for the early EV adopters at the moment is kerbside charging for employees without driveways; something that the Competition and Markets Authority (CMA) also highlighted as a “significant” challenge in its recent progress report on its investigation into the UK’s charging infrastructure.

Hollick commented: “The kerbside charging infrastructure is quite poor and it’s tricky to get a kerbside charging unit put in because at the moment the Government has got a pot of money that will cover 75% of the cost, while the other 25% should be paid for by the local council. But there are over 400 local councils in the UK. Some have money, some don’t, but if you’re a national fleet operator, you need to deal with all those councils separately.

“And even if the company wants to pay the 25% themselves, they still need to get approval from the local council to put it all in. Of course you also need to bear in mind that even if you put a kerbside charging unit in, you might not get exclusive use anyway.”

Without kerbside chargers, Hollick added that employees who can’t charge at home are either reliant on local infrastructure or the motorway charging stations, which bring their own issues.

Hollick also said that fleets running commercial vehicles are facing twofold problems on accessing EVs: “The first thing is on the panel vans; the big boys are taking the majority of the availability in the market, which doesn’t leave very many e-vans available for the rest of the market.”

He continued: “In the heavies in particular, there just isn’t the depth of the portfolio and that’s causing some issues, particularly with Clean Air Zones and Oxford with its Zero Emission Zone, which is going to make it quite expensive to deliver product when there’s no heavy good vehicles in the electric sector.”

But Hollick did stress that these issues will be addressed in time: “Of course a lot of these hurdles are only being faced by the early adopters at the moment and in time when the majority of the market is running EVs there will be solutions in place. It’s just complicated at the moment.”

Finally, Hollick said the AFP remains committed to helping all members with EV uptake. Solutions on offer include a new charter that provides a helpline and administrative assistance as well as best practice documents and education, plus its new ‘Making the Switch to EVs’ course, all supporting those fleets exploring electrification.

“It’s by far the biggest challenge for this year,” he continued. “Everyone is talking about it for various reasons. Anything we can do to help members, we will.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.