Reimbursement for electric and hybrid vehicles
Adapt your reimbursement policies for the new reality of electric and hybrid vehicles.
Why electric vehicles change the reimbursement math
The arrival of electric and hybrid vehicles in the corporate fleet created a legitimate question: if an electric car costs far less per kilometer than a gasoline one, should the company reimburse less to whoever drives an EV? The answer requires separating two concepts that many people confuse, the energy cost per kilometer and the reimbursement rate per kilometer. They are different things, with different purposes, and treating them as if they were the same produces unfair policies and internal disputes.
Energy cost is only one component of the total cost of driving. Fair reimbursement does not cover only fuel; it covers depreciation, maintenance, insurance, tires, and general wear of the vehicle. When you look at the full picture, the gap between electric and gasoline shrinks considerably, because the EV trades a low energy cost for depreciation and battery cost that are still significant. This guide shows how to adapt the policy without falling into the trap of underpaying.
Energy cost per km: electric vs gasoline
It helps to start with the direct energy comparison, which is where the difference looks dramatic. An efficient combustion car spends around US$ 0.58 per kilometer on gasoline alone. A typical electric car consumes about 18 kWh per 100 km; with residential energy at US$ 0.90 per kWh, that gives 0.18 kWh per km, or roughly US$ 0.162 per kilometer of energy.
At first glance, the electric costs about a third of the gasoline car in energy. But that number is only the tip of the iceberg. It ignores the EV's higher purchase cost, the accelerated depreciation of the battery, and the difference between charging at home and charging at fast public stations, which can cost two or three times more per kWh. So cheap energy per km does not automatically mean the total cost per km is proportionally low.
Home charging vs public charging
Where the vehicle is charged completely changes the math. Overnight residential charging is the cheapest and most predictable, which is why most estimates use the home tariff as the baseline. Charging at public stations, especially ultra-fast ones on highways, can cost two to three times more per kWh, and in some cases even charges by the minute of occupancy.
For an employee who drives a lot and depends on public charging during the workday, the real energy cost per km can double and approach that of a gasoline car. A fair policy must recognize this reality, whether by reimbursing the documented real charging cost or by adopting a single per-km rate that absorbs these variations without forcing the employee to keep every charging receipt.
Why tax authorities use a single per-km rate
Here is the point that most surprises managers: tax authorities like the IRS apply the same standard mileage rate regardless of fuel type.[^irs-2025] A Tesla and a diesel pickup are reimbursed at the same rate per mile. This is not an oversight; it is a deliberate choice for administrative simplicity. The standard rate is an average that incorporates fuel, depreciation, maintenance, and insurance of a typical fleet, and calculating separate rates per technology would make the system impractical.
For companies, this carries an important lesson: you do not need to create a special, lower rate just because the car is electric. You can adopt the recognized standard rate and treat all vehicles equally. Anyone who wants to understand the logic of this reference rate should review the guide on the IRS standard mileage rate, which anchors good reimbursement practices for global teams.
How to set a fair internal rate for EVs
Companies that prefer to reflect real cost can still do so, as long as they look at total cost of ownership, not just energy. The depreciation of an EV is different: the battery loses capacity over the years and represents a significant part of the car's value. Maintenance, on the other hand, tends to be lower, because there are fewer moving parts, no oil changes, and less brake wear thanks to regenerative braking.
The practical recommendation is not to punish whoever drives electric with an artificially low rate based only on energy. If the company wants to differentiate, let it be by a modest margin, and always covering depreciation and maintenance honestly. The fundamentals of what can and cannot be reimbursed are detailed in the guide to tax deduction for business mileage, worth consulting before finalizing any policy.
Worked example: energy vs reimbursement in practice
Let's get to the numbers to make everything concrete. Consider an employee who drives an EV and covers 1,500 km in a work month. Her energy cost is: 1,500 km × US$ 0.162 per km = US$ 243.00 of electricity for the month, assuming residential charging.
Now look at the reimbursement. The company applies a standard per-km rate of US$ 1.15, the same used for gasoline cars. The reimbursement is: 1,500 km × US$ 1.15 = US$ 1,725.00 for the month. The difference between the reimbursement and the energy cost is US$ 1,482.00, and that is exactly what covers battery depreciation, insurance, tires, maintenance, and vehicle wear. If the company had made the mistake of reimbursing only the energy (US$ 243.00), the employee would be subsidizing US$ 1,482.00 a month out of her own pocket, or US$ 17,784.00 a year, to use her personal car for work. The example shows why reimbursement should never be confused with fuel cost.
Updating the policy for a mixed fleet
When the fleet mixes gasoline, hybrids, and electrics, the policy needs a clear, communicated decision. The simplest and most defensible option is to adopt a single per-km rate for all vehicles, mirroring the tax authority's approach. This eliminates disputes about technology, simplifies approval, and keeps equity between people driving different cars.
If the company chooses to differentiate, it must document the criterion, review the table frequently, and ensure no category falls below the real cost of driving. To understand how reimbursement fits into the broader tax and labor picture, it helps to review how mileage reimbursement works, which explains why tax-free reimbursement depends on reasonableness and documentation, not on the type of engine under the hood.
Depreciation and total cost of ownership
Depreciation is the most misunderstood component of an EV's cost. Electric cars usually have a higher purchase price and a battery that loses capacity over time, which can accelerate value loss in the early years. In exchange, they make fewer trips to the workshop, need no oil changes, and wear the brakes less because of regenerative braking. The net result depends heavily on the model, the battery warranty, and the annual mileage.
When you add it all up, cheap energy and low maintenance, but depreciation and insurance that are often higher, the total cost per kilometer of an electric car tends to approach that of a modern combustion car, not to be a fraction of it. That is precisely why reimbursing only energy distorts the economic reality of whoever drives. An honest total-cost-of-ownership analysis, reviewed periodically, gives the company confidence to set a rate that is simultaneously fair to the employee and defensible before a tax audit.
How Quilometragem handles EVs and hybrids
Quilometragem handles electric, hybrid, and combustion vehicles within the same flow, frictionlessly. The administrator configures the per-km rate the company decided to adopt, by team or by vehicle category, and the system applies that rate automatically when calculating the route via map. The employee does not need to keep charging receipts or do any math; they enter origin and destination and receive a professional receipt ready for approval.
Each receipt carries a complete audit trail and integrity hash, which protects the company if the vehicle type is questioned in an inspection. The integration with Clara exports everything to the expense panel, keeping electrics and gasoline in the same consolidated report. The result is a policy prepared for the fleet's energy transition, fair to whoever drives and defensible before the tax authority.