In the case of a Battery electric vehicle (BEV), it means the maximum range per recharge, typically between 150 and 400 miles.
[1] For a plug-in hybrid electric vehicle (PHEV), it means the maximum range in charge-depleting mode, typically between 20 and 40 miles.
[1] PHEVs can travel considerably further in charge-sustaining mode which utilizes both fuel combustion and the on-board battery pack like a conventional hybrid electric vehicle (HEV).
Similarly a vehicle like the Chevrolet Volt which has a parallel design disengages the internal combustion engine (ICE) from the drivetrain while in electric mode[2] and has a clear AER.
One example of this calculation can be found in Argonne National Labs report titled "TEST PROCEDURES AND BENCHMARKING Blended-Type and EV-Capable Plug-In Hybrid Electric Vehicles.