New electric mileage reimbursement rate ‘short-changes’ van drivers

By Gareth Roberts

1 December 2021

The advisory electricity rate (AER) increase, effective from today (Wednesday, December 1), will still not cover the costs of charging an electric van at home, according to TMC.

HMRC announced last week that the AER for pure electric vehicles (EVs) would increase for the first time since its introduction in 2018, from 4p per mile to a new rate of 5ppm.

However, analysis from TMC shows that the average cost based on home charging an electric LCV is 7.8ppm. The only vehicle that costs less than 5ppm to charge is the Renault Kangoo E-Tech.

If the cost of public charging is factored in – the use of which is highly likely for LCV drivers with only 30% having the ability to charge at home – the AER falls even further short, says TMC.

Paul Miers, TMC’s chief data officer, said: “These figures are best case scenario as they are based on the WLTP and the driver charging their vehicle at home. T

“The majority of van drivers will use public charge points, which increases the cost per mile considerably.

“The other factor to consider is that these figures are for unladen vans. Once you add in racking, equipment and tools there will be even more upward pressure on the actual cost per mile.”

TMC’s research suggests that a higher AER is needed for vans and larger electric cars because the actual cost per mile for domestic charging is as much as 130% higher than the AER for vans based on the WLTP figure.

The table below shows the cost of running electric vans using three different scenarios compiled by TMC’s team of data analysts.

Column 1 shows the cost per mile based on WLTP data, using home charging for all vehicle charging. Column 2 shows the cost per mile based on the same data but with power consumption per mile raised by 15% to reflect real world battery usage. Column 3 uses the same data as column 2 but assumes a mix of 75% home charging and 25% public charging.