As overall passenger vehicle fuel economy increases, states face declining revenues from traditional gasoline taxes used to finance vital infrastructure projects. Many states have implemented annual registration fees for EVs to account for this revenue shortfall and ensure that EV drivers contribute to road network maintenance. This paper compares existing and proposed EV fees with the gas taxes paid by the average new gasoline vehicle to determine whether they are placing an additional tax burden on EV owners compared to non-EV owners, then estimates the effectiveness of EV fees at increasing highway funding revenues. The report finds that EV fees proposed in some states could exceed the amount owners of gasoline-powered vehicles pay in gas taxes by almost four times. The paper also argues that proposed electric vehicle fees will not make a dent in declining state revenues, generating only an average of 0.04 percent of current state highway funding, and only increasing to 0.3 percent by 2025.

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More About this Resource

Publisher: Consumer Reports

Date: September 1, 2019

Countries: United States

States: None