Electric vehicles (EVs) need to pay their fair share of road construction and maintenance costs. But by targeting EV owners with inequitable and inefficient fees, state legislatures continue to miss the opportunity to solve the challenge of responsibly funding highways.
In the United States, highway construction and maintenance are primarily funded through taxes on gasoline and diesel fuel, known commonly as the “gas tax.” But current taxation revenues do not meet needed funding levels in many states. In response, more than 30 states have sought to make up for the shortfall by imposing large registration fees for electric vehicles. But there aren’t enough EVs to bridge the gap, and larger fees risk stifling electric vehicle adoption.
A better solution, outlined in this policy brief, would be to create a structured fee system so that EV owners pay a fee proportional to their vehicle’s impact on the roads. Such a system would avoid unnecessary administrative processes and ensure that EV owners pay their fair share for highway maintenance, but not stifle the continued adoption of electric vehicles.