Summary
- Kate L. Harrison is a friend of CleanTechnica and provides insights into managing EV fleets for businesses
- The issue of home EV charging reimbursement involves challenges with determining fair rates
- A flat average utility rate for reimbursement is not ideal as electricity rates can vary widely
- Using true costs for reimbursement ensures fair compensation for employees and financial efficiency for the company
- It is important for organizations to adopt accurate reimbursement methods to comply with regulations and optimize their EV investments
Article
Kate L. Harrison, co-founder of MoveEV, has shared insights with CleanTechnica on managing electric vehicle (EV) fleets for business purposes. She discusses the challenge of determining the appropriate reimbursement rate for employees charging their EVs at home. While telematics can provide charging event data, the variability in residential utility plans complicates the process. The average utility rate of 16.43 cents per kilowatt-hour (kWh) is not sufficient for accurate reimbursement, as utility rates can vary significantly.
The average electricity rate of 16.43 cents per kWh does not account for the wide disparities in utility rates across different regions and even within the same location. For example, in California, electricity rates varied between regions, with some residents paying significantly more than the average rate. Fluctuations in rates based on time of day or year also contribute to the challenge of using a flat average rate for reimbursement. This approach can either shortchange employees or result in unnecessary costs for the company.
Flat-rate reimbursement, rooted in IRS mileage deduction rates, was not intended for reimbursing employees for home charging their company EVs. Using a flat-rate methodology for reimbursing electricity costs can lead to discrepancies in reimbursement amounts for employees charging their EVs at home. This approach may not be fair or legal, as employees have different utility rates and plans. Inaccurate reimbursement rates can lead to dissatisfaction among employees and potential legal issues for the organization.
Adopting a flat-rate reimbursement policy for EVs poses risks for organizations, including potential class-action lawsuits if employees are consistently under-reimbursed. Over-reimbursement can also lead to unnecessary costs for companies. Flat stipends are taxable and may incentivize employees to charge their company EVs in public or at depots, leading to increased fuel spend for the organization. Using true costs for reimbursement, based on actual charging data and employee utility bills, can ensure fair compensation and protect the company from legal and financial risks.
As the shift to electric vehicles continues, organizations must reevaluate their reimbursement policies to reflect the true cost of electricity for home charging. The average utility rate is not sufficient for accurate reimbursement, and companies should adopt more nuanced and accurate methods to ensure compliance and financial efficiency. By using true costs for reimbursement, organizations can protect themselves from legal risks, compensate employees fairly, and optimize their investment in EVs.
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