Changes to the energy price cap could increase driver resistance to switching to EVs due to concerns over being left out of pocket.

Ashley Tate, CEO and Co-Founder, Mina(1)

Ofgem is expected to announce a new energy price cap later this week and, due to the energy crisis, analysts are expecting energy bills to increase by up to 51%.

The new cap follows an increase last October and means those on variable tariffs could see bills sky-rocket even further – potentially to around £1,900 for an average user.

Concerns are rapidly mounting about the impact on Brits, and now EV payment solution expert Mina is warning of a knock-on effect for EV drivers being reimbursed through the Advisory Electricity Rate (AER) for electric company car mileage.

Although this went up late last year to 5ppm after intensive conversations with HMRC by the AFP and BVRLA, there were already worries that it was still too low.

And now Mina has said that just using the AER rate to recompense drivers could leave a shortfall of nearly £1,000 a year.

In 2021, the average tariff rate for electricity was 20p per kWh, whereas today, this figure is closer to 30p per kWh, making the average pence per mile a more realistic figure of around 10.1p.

This means, drivers could be short by up to £832 per year based on an annual mileage of 20,000.

Instead, it’s saying that the only way EV drivers will not be out of pocket for business mileage is to pay them accurately for any consumption used at home by eliminating the use of flat reimbursement rates.

For example, Mina’s EV Fuel Card solution pays drivers’ energy suppliers directly for energy consumed at home. Its hardware-agnostic technology enables the business to accurately calculate the true cost so that drivers are never out of pocket.

Mina CEO and co-founder, Ashley Tate said: “Drivers should never be out of pocket when it comes to business mileage and will most definitely resist the switch to EV when they realise the complications that can come with paying for EV charging. We’ve seen this first hand with some larger fleets who’ve already made the move to EV.

“It doesn’t have to be this way though, our mission at Mina is to make paying for EV charging radically simple so businesses can reassure drivers their consumption will be paid for accurately whether they charge at home, in public or at work.”