(most EVs are light-duty cars) had a fuel economy of 39.4 mpg in 2017. The average new light-duty car in the U.S. in January 2020 was $0.25 per gallon of gasoline and $0.27 per gallon of diesel fuel. Punitive registration fees for BEVs would be a double tax, and for PHEV drivers this would be a triple tax. Many states and municipalities have taxes on electricity, either general sales taxes or special-purpose taxes. Therefore, EV drivers pay taxes on the electricity used to charge the vehicles too. Unlike gasoline vehicles, EVs run on electricity. If the EV is priced over $60,000, then the EV pays far more in sales tax and excise tax. An analysis by the Acadia Center showed that, in Massachusetts, these impacts result in EVs contributing more to state and local revenues than comparable gasoline vehicles.Īn EV that costs $35,000 before rebates would pay about $93 less per year in gas taxes than a comparable conventional sedan, but $101 more in average annual excise tax over the vehicle’s lifetime – as well as $908 more in sales tax. Since EVs generally cost more than their conventional counterparts, they pay higher sales taxes (in states with sales tax) and higher municipal excise taxes. What EVs Already PayĮVs do pay taxes that may support road construction and maintenance, as well as other taxes that support other goals. To impose a punitive registration fee, road usage charge or other penalties to BEV and PHEV drivers would hinder the adoption of these clean vehicles and do little to cover the funding shortfall. Applying a registration fee of $100 per year to each one (similar to what has been proposed in other states, and more than would be paid in-state gas tax by a new gasoline vehicle) would generate about $3 million per year, covering 0.5% of the funding shortfall. The state has approximately 30,000 electric vehicles (EVs), including both BEVs and PHEVs. For example, the transportation funding shortfall in Massachusetts is estimated at $650 million per year. However, at present, they account for a minuscule portion of transportation funding shortfalls. In the long term, as these vehicles gain market share, they will need to contribute to the maintenance of roadways. Now, many states are experiencing a severe shortage in the revenue needed to maintain highways.īattery electric vehicles (BEVs) do not pay any gas tax, but plug-in hybrid electric vehicles (PHEVs) do – and both still use the roads. In fact, average vehicle fuel efficiency increased from 18.8 mpg in 1990 to at least 22.3 mpg in 2017 for all light-duty vehicles (SUVs and pick-up trucks included) on the road today, with new passenger cars able to achieve 39.4 mpg and new light-duty trucks able to achieve 28.6 mpg. In addition, vehicle mileage efficiency has improved significantly over the past decade, which provides a host of air quality and economic development benefits, but reduces the revenue from gas taxes. Over the years, the revenue to pay for the roads has decreased in each state due to increasing labor and material costs through inflation, and the fact that gas taxes have not been indexed to inflation. The federal government and the states fund highway construction and maintenance through taxes on gasoline and diesel fuel. An in-depth white paper on transportation funding and EV fees is available here. Paying for the Roads: Electric Vehicle Road Usage and Registration Fees
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