Excess Mileage Charges When Leasing an EV: an Unexpected Twist
When leasing an electric vehicle, the contract usually stipulates how many kilometres are included. If too many kilometres are driven during the lease period, the driver or company may be liable to pay so-called excess mileage charges when the time comes to return the vehicle. Excess mileage charges are expensive, easily ranging up to 30 cents/km. That might not seem like a lot, but if you’re only 1000 km over the allowance of your leasing contract, you could already find yourself hit by a 300-euro additional charge. Especially in times like these, when supply chain issues are causing delays for new car deliveries, costs can quickly mount to a few hundred euros or more.
Traditionally, fleet managers would monitor the mileage (odometer readings) of their cars through the maintenance reports and the fuel card service provider. This allowed them to track the performance of each vehicle compared to the leasing contract allowance and intervene before costs span out of control.
But an unexpected issue arises when transitioning a fleet to EVs, as opposed to ICE vehicles: It is more difficult to stay on top of tracking mileage. Maintenance is much less necessary on EVs (Tesla now recommends drivers only come in once every 2 years) and charging solutions from e-mobility service providers don’t collect the mileage readings. The latter is partly due to the fact that the charge poles usually don’t ask for a mileage to be inserted when activating a charging session. On top of this, the charge pole cannot extract the odometer reading from the car itself, due to the protocol in place. This leaves the fleet manager blind and can lead to very unpleasant surprises at the end of a leasing contract.
A potential solution to the problem above is to use telematics through the installation of a specific dongle/hardware in the car. But in this new era of connected devices, such a setup might not be necessary. Instead, a full digital journey can be chosen, simplifying the journey for both the driver and the fleet manager. Add in a lower cost as a bonus, and you’re wondering what’s the catch? Well, there isn’t one! The main reason that we’ve not massively adopted this way of working yet is because connected cars are still a relatively new occurrence. Although they have been imposed by regulation since 2018, the platforms behind these cars still needed to collect the data and make it useable and were thus only recently launched by most OEMs. Some are still launching them as we speak. As such, this rather new evolution might be the beginning of a new way of fleet management. And the above example might just be the first in a list of remote services that can help lower TCO and improve driver experience. It’s an exciting evolution to follow, that’s for sure!
re.alto aggregates all these new platforms into a single digital access layer, so that a fleet manager has a single point of contact to work with. Don’t hesitate to reach out to us for more information on how re.alto can help improve your company’s transition to EV.