It’s been a tough couple of weeks for energy companies as wholesale energy prices have rocketed, causing some companies to go into administration. Inevitably these price increases are now being passed on to consumers.
This will undoubtedly impact drivers charging fleet vehicles at home. Just 6 months ago the average electricity price was roughly 14.2 pence per kWh, and the average now steers more towards 20.4 pence per kWh.
Drivers charging at home will see an increase in costs due to the energy price increase if they’re not locked into a fixed rate with their supplier. To ensure drivers aren’t out of pocket, these increases must be tracked to ensure they’re getting reimbursed correctly.
AER not fit for purpose
Many businesses though, are still using the Government’s Advisory Electric Rate (AER) of 4 pence per mile to reimburse their drivers, which we already know is short changing them. With tariff rates increasing like they are, it just highlights, now more than ever, how inaccurate this method of reimbursing drivers is.
You could argue a fluctuating AER is needed, but because energy suppliers’ tariff rates differ vastly depending on where you live to the supplier itself, this is just not possible.
To break it down, the lowest rate currently in the UK is roughly as low as 10.217 pp kWh (during off-peak hours), and the highest tariff is a staggering 25.544 pp kWh. That’s a 250% increase in difference. There has also been roughly 369 tariff changes in the UK over the past 6 months, so unless each rate is being tracked, businesses will be incorrectly reimbursing their drivers for the cost of charging their EVs.
Mina’s Homecharge is the only company in the UK that integrates with drivers’ home charge points and energy suppliers to accurately calculate the exact cost of charging their EVs at home. We not only track if a driver has switched energy suppliers, but we also track changes in tariff increases. This ensures we are always paying the exact amount it has cost the driver to charge their EV at home.
At the end of the month, we then pay the driver’s energy supplier directly for these costs and invoice the fleet owner for all charges, both home and public, across their fleet.
So nothing for your drivers to pay, no mileage calculations to make, just accurate payment for EV charging costs.
Ashley Tate, CEO and Co-Founder, Mina comments:
“The only fair way to pay for a driver’s charging is to pay the actual cost. No AER formula will ever be able to get close to a fair average pence per mile, as there are too many common extremes in the cost of electricity. Regulatory changes to how energy suppliers buy electricity will make the difference in tariffs even more extreme.
This means if you pay AER (no matter what the rate), you’ll always be overpaying some and underpaying others.
I hear a lot of people say the tax benefits make it beneficial, even if the drivers are not being paid enough as a result of the AER for their charging, but that doesn’t make it fair.”
So if you care about your drivers, and don’t want to see them out of pocket, get in touch to learn more about how the Mina Solution can help your fleet here.