September 7, 2021
How To Handle EV Driver Reimbursements With At-Home EV Fleets
6 Min. Read
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Calculating Energy Costs: Accurately reimbursing EV fleet drivers requires separating home charging costs from other electricity usage, using telematics to track travel distance, electricity consumption, and optimize charging rates and routes.
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Reimbursement Strategies: Options include proprietary company chargers with dedicated meters, flat-rate reimbursements based on off-peak rates, driver-specific calculations using local utility rates, manufacturer tools for energy usage reports, or energy cards for public chargers to streamline expense tracking.
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Additional Considerations: Fleet managers should account for federal and state EV incentives, such as tax credits and low-carbon fuel credits, and opt for Level 2 chargers over slower Level 1 cords to save time and reduce electricity costs.
Gas station cards and mileage allowances are common solutions for reimbursing fleet drivers. Now, however, fleet electrification has companies grappling with a similar problem – How do we handle EV driver reimbursements? How can we best accomplish this transition?
Old solutions, per mile or per fill-up, do not fit with electrification. Let’s look emerging payment and EV charging solutions that offer answers to the take-home driver reimbursement dilemma.
How To Handle Driver Reimbursements With EV Fleets
Calculating Energy Spending
One basic advantage to an EV is the low cost of operation. The electricity to run an EV costs a fraction of what gas costs to go the same distance. But, determining the cost to charge the vehicle can be a lot more complex than keeping track of gas purchases, particularly for an at-home EV fleet. To fairly handle EV driver reimbursements (and get an accurate picture of your fleet operation), you need to separate the energy spend from EV charging versus other uses of electricity.
This involves effectively using EV telematics. One basic use of telematics for most newer vehicles is the navigation system. The GPS capabilities help track the vehicle’s location and can alert the driver to upcoming gas stations or, in an EV, charging stations. But EV telematics does a lot more to help you calculate energy spending per vehicle – and identify outliers.
For better management of your EVs and optimal use, telematics technology is essential. It provides communication of travel distances, time, electricity use, and engine performance and service needs. Furthermore, the technology lets drivers manage range, optimize utility rates to reduce charging costs and achieve better route optimization.
Offering EV Driver Reimbursements
Before implementing a new EV fleet transition, particularly one that will be largely charged at employee residences, you need to have policies in place for reimbursing drivers for their actual business mileage. Calculations based on the cost of fuel or miles driven no longer apply.
“Drivers can be reimbursed with a payment app, and can transfer funds to their personal bank accounts. This improves the traditional reimbursement process significantly by minimizing manual processes and errors.” – Jake Lowe
Your fleet needs to reap the benefit of the lower EV operating costs with mileage reimbursement rates that reflect the true electricity costs. That isn’t easy with a vast range of costs between peak energy use times, off-peak charges, use of fast public chargers and more. Here are a few ideas:
Proprietary plug-in charging stations (owned by the company)
Depending on how they use EVs and the range expectations, many companies opt to implement proprietary chargers at their worksite and/or homes. Dedicated meters and hardware can eliminate the need for reimbursement, with totals tracked on actual usage.
Flat-rate reimbursement
Depending on the variability and complexity of the energy rates your employees actually pay, you may want to consider a consistent flat-rate reimbursement policy. This does simplify reimbursement and, if based on off-peak rates, would incentivize employees to charge the EVs using lower-cost options.
However, a flat-rate mileage reimbursement policy is difficult to implement in firms over large geographic areas dealing with a variety of electric rates and driving conditions. It is likely to be unfair to some employees or to your company. To avoid inequities, some find it easier to reimburse employees for miles driven rather than offering a flat monthly allowance.
Actual energy rate
Another option for fleets transitioning to EVs is a driver-by-driver approach, taking the time to calculate exact mileage rates for EV driver reimbursements, unique to each individual. You would need to work out how much energy each vehicle consumes per mile, home charging costs derived from the local utility and charger installed, and costs at public chargers.
Comparison Table for EV Fleet Driver Reimbursement Options
| Reimbursement Type | Monthly Stipend | Based on Average Electricity Rates | Reimbursement for Actual Electricity Spend |
|---|---|---|---|
| Amount | $100 Monthly Stipend | $0.26 Average kWh Rate | $0.17 Actual kWh Rate |
| Costs Employer | $106.20* | Costs Employer & Reimburses Driver $121.55 | Costs Employer & Reimburses Driver $70.13 |
| Nets Driver | $68-$76** |
Example: Chevy Equinox EV AWD (85 kWh battery with 300-mile range)
Assumes 20,000 miles per year
*Factoring in 7% payroll tax
**Factoring in 30% income tax
Auto manufacturer tools
Some EV manufacturers offer features that help tabulate energy usage. They can generate reports to ensure drivers receive reimbursement only for the electricity consumed while charging work vehicles at home.
Energy cards (similar to gas credit cards)
The electrification of fleets is forcing gas stations and other businesses to electrify their offerings. While free public chargers exist, fleet drivers are likely to seek rapid, high-powered chargers that get them back on the road quicker. Several vendors are now offering energy cards (a.k.a. fuel cards) to use at charger installations so employees do not have to pay and file charging expenses. The drivers may use home chargers too, but the cards help ensure costs are tied fairly to usage.
Other Considerations for EV Driver Reimbursements
While formulating a plan for your EV driver reimbursements, keep in mind three other areas that can impact your policies:
- Green incentives and rebates at the federal, state and city levels impact your fuel and operating costs. There are rebates and tax credits for purchasing many EVs. In addition, credit-based systems exist to encourage low-carbon intensity fuel use. These “transportation credit” programs allow for the generation of credits that can be auctioned to obligated buyers, such as electric power plants, industrials and fuel suppliers that create the majority of greenhouse gas emissions. Moving to EVs may result in selling credits, further offsetting actual operating costs.
- Home-based charging equipment usually means Level 1 cords that use standard household outlets and are very slow at charging vehicles and are impractical for anyone driving more than 25 miles per day. The better option is Level 2 charging that uses a higher voltage, much like your clothes dryer. While Level 2 charging equipment costs more to buy, they offer time savings, which can mean paying less for the electricity on time-of-day utility rate plans, and waking up in the morning with a full battery.
- Proprietary systems and proven processes from fleet electrification experts, such as Qmerit, can help ensure your transformation is successful. We have simplified the shift from fossil fuels to EVs for countless companies. Our turnkey solutions and vast experience can help you manage expenses and establish an EV fleet that satisfies drivers, fleet management and your bottom line.
Get EV Fleet Charging Solutions with Qmerit
Each of these strategies has both its advantages and limitations. The key to a high-performing EV fleet is to implement several complementary charging strategies to build a flexible charging network that expands your service area.
Qmerit is here to help you start planning your fleet electrification project. Our Budget Builder tool is an AI-powered platform that generates accurate pricing for your project while taking installation complexities into consideration.
As the largest and most trusted electrification network in North America, our network of certified electricians has installed over 770,000 EV charging stations in homes and businesses across the U.S. and Canada.
We’ve earned our reputation as the most experienced and high-quality electrification service and EV charger installation network and can help make your transition easy with our experience and commitment to your business.
Learn more about EV fleet charging solutions for corporate vehicles and contact Qmerit to explore how fleet electrification can save you money, improve your brand reputation, and better position your business for the future!
