Overhauling the current Advisory Electricity Rate (AER) for electric vehicles would remove a major barrier to fleet electrification and encourage greater home charging.

Nine out of 10 (91%) fleet operators believe that current AER for electric vehicles needs an overhaul

The current AER specified by HMRC is just 4ppm and, according to the Association of Fleet Professionals (AFP), completely fails to cover reimbursement of fuel costs when most individuals are now paying closer to an estimated 18 pence per kwh.

Now, new research from the AFP and Nissan has found nine out of 10 (91%) fleet operators believe that current AER for electric vehicles needs revising, encouraging home charging as energy prices soar but also supporting increased EV adoption.

Highlighting just how much of an issue the existing 4ppm rate is, Paul Hollick, AFP chair, explained: “This is a stumbling block for fleets adopting EVs, as responses to the survey show. Some managers even said that it was stopping their electrification process completely because their drivers did not want to be out of pocket in the face of rapidly rising electricity prices.

“While the sample size is quite small – just 45 fleets – it does show that this is being recognised as a very real issue for businesses as they look to adopt electric cars. Everyone knows home charging is essential but the AER creates a very real difficulty.”

But, this is not just a driver reimbursement issue and revamping the AER figure would also ensure EV whole-life costs are far more accurate.

Hollick added: “Many fleets have used the AER to calculate their EV whole-life costs and are now finding these are well adrift of the results they are now seeing. The AER has become detached from real-world finances.”

Although the AFP, along with the BVRLA, has long highlighted how the AER rate, first introduced in 2018 and kept at 4ppm since, is no longer fit for purpose, HMRC has not revised the rate in today’s announcement about new Advisory Fuel Rates.

However, Hollick said that the AFP had made some progress in dialogue with HMRC, with the use of an “actual cost” model now being allowed.

“We are continuing lobbying activity and are hopeful of some movement soon. This is an issue that needs to be resolved in order for our sector to speed its conversion away from petrol and diesel vehicles and towards electrification.”

The AFP survey on the AER was carried out through its new EV hub, launched last month with the support of Nissan and designed to support fleet operators through the process of EV adoption with a range of resources.

Hollick outlined: “With financial assistance from Nissan, we are now able to provide a range of information to aid our members as they begin to adopt electric vehicles and also carry out these monthly EV surveys. It’s an important element of our digital strategy.”

The AFP is also hosting a webinar on the issue of kerbside charging at 9am on Wednesday 15 December. Further details can be found on the AFP website.