Air Quality

Published on December 30th, 2015 | by Michael Barnard

80

Electric Cars Don’t Pay Gas Taxes: So What?

December 30th, 2015 by  

Is it a sin that electric car owners don’t pay gas taxes? No, not at all, but you’d never know it listening to some people squawk. There are anti-electric car types who think this is a huge deal, instead of kind of an embarrassing story for internal combustion cars. Let’s tear it apart and see, shall we?

The gas tax is pretty cheap per person

The average US gas tax is about 48.7 cents per gallon. At the average 13,476 miles US citizens drive, assuming 20 miles per gallon, that comes out to $328 annually. If they drive fuel efficient cars, it obviously goes down. For example, at the current highly theoretical average of 25 miles per gallon, the average person pays about $263. If they drive a car that manages 30 miles per gallon, they are down to $218. According to the logic of electric car haters, fuel efficient cars are getting an unfair ride, too.

The gas taxes don’t pay for the roads and highways:

“your gas taxes don’t cover the cost of roads and highways. Since the interstate system was implemented in 1947, US spending on highways has exceeded the amount collected from fuel and vehicle fees by more than $600 billion. Where has the rest of that money come from? Mostly bonds, property taxes, and the general fund. So even if you don’t drive, you’re paying for highways, a type of infrastructure that only cars can use. Roads in your city are generally financed through local, property, and sales taxes”

Well, that’s kind of annoying, isn’t it? Taxes levied to pay for roads don’t actually cover their costs. Actually, they don’t even begin to cover the costs. So electric cars not paying the small amount that purchasing gas contributes to road maintenance is a bit of a non-issue. Society is subsidizing roads big time.

Air pollution from internal combustion cars has serious health-related costs:

“The OECD has estimated that people in its 34 Member countries would be willing to pay USD 1.7 trillion to avoid deaths caused by air pollution. Road transport is likely responsible for about half.”

The Organisation for Economic Co-operation and Development Electric represents most of what we consider the developed world, including the USA, UK, Australia, Canada, and 30 other countries. China and India aren’t members, so this isn’t about places with terrible pollution — this is about your street corner.

Electric cars emit no particulate matter or chemical pollution in urban areas. As the Union of Concerned Scientists pointed out recently, you have to get deep into coal country before pure electric cars are as polluting as even the most efficient of hybrids. Even there, it is entirely possible to buy entirely pollution-free electricity from renewables in most places, and a larger percentage of electric car owners do that than the general public.

Collisions due to vehicles are subsidized from the public purse:

“Public revenues paid for roughly 7 percent of all motor vehicle crash costs, costing tax payers $18 billion in 2010, the equivalent of over $156 in added taxes for every household in the United States.”

Since Teslas are leading the way in making driving safer through autonomy, that’s yet another societal value proposition that they are advancing. This one by itself is worth half of the $300 that the gas taxes cost, according to these numbers.

Climate change is costly, and internal combustion vehicles don’t bear that cost:

“Four global warming impacts alone—hurricane damage, real estate losses, energy costs, and water costs—will come with a price tag of 1.8 percent of U.S. GDP, or almost $1.9 trillion annually (in today’s dollars) by 2100.”

Obviously, electric cars are part of the answer to climate change, not a major contributing factor as internal combustion cars are. The argument that electric cars aren’t paying their fair share is just getting more and more embarrassing for people who make it, isn’t it?

Internal combustions engines make noise, and traffic noise makes people less healthy:

“The social costs of traffic noise in EU22 are more than €40 billion per year, and passenger cars and lorries (trucks) are responsible for bulk of costs. Traffic noise alone is harming the health of almost every third person in the WHO European Region. One in five Europeans is regularly exposed to sound levels at night that could significantly damage health.”

Of course, electric cars make much, much less noise than internal combustion vehicles and so reduce this health cost as well. Despite this, the USA is absurdly trying to regulate electric vehicles to make more noise than most internal combustion vehicles instead of sensibly forcing older vehicles to get quieter.

What does this net out to?

Screen Shot 2015-12-27 at 12.41.57 PMThe City of Vancouver did a societal cost analysis of various forms of commuting that is worth looking at. The study was done when the Canadian dollar was close to at par with the US dollar, so this holds roughly true for the USA. Five kilometres is just over three miles, to give a sense of scale for people living in the USA.

Electric cars, especially ones with autonomous features, save a portion of that societal cost. Let’s extend that cost for cars to a full year’s driving for the average US citizen. Americans drives an average of 13,476 per year, or 21,688 kilometres. That means that the average societal cost per US citizen of car driving is about $12,000 per year.

Screen Shot 2015-12-29 at 10.30.08 PMThe underlying data from the Vancouver study shows that the portion of costs avoided by electric cars represent about 37% of the total, or about $4,440 per year. Remember that $300 for someone getting about 20 miles per gallon? That’s less than 7% of the value that an electric car provides every single year.

Let’s extend this saving over a decade of car life. That’s about $44,400 of societal value given back. That’s money that could be spent on hospitals or school or just not paid in taxes. Or even used to maintain roads and bridges, if someone wanted to do that.

Electric cars are a huge economic win for the societies that promote them. Making the claim that electric cars are somehow subsidized by not paying gas taxes when the opposite is actually true — that car drivers are heavily subsidized already and electric cars reduce that societal subsidy — is evidence of heavy blinkers.


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About the Author

For the past several years Michael has been analyzing and publishing reports and articles on decarbonization technologies, business models and policies. His pieces on electrical generation transformation and electrification of transportation have been published in CleanTechnica, Newsweek, Slate, Forbes, Huffington Post, Quartz, RenewEconomy, RenewablesInternational and Gizmag, as well as included in textbooks. Third-party articles on his analyses and interviews with Mike have been published in dozens of news sites globally and have reached #1 on Reddit Science. Much of his work originates on Quora.com, where Mike has been a Top Writer annually since 2012. He also has published a climate-fiction novel, Guangzhou Future Tense.



  • mike smith

    electric cars are heavily subsidized by the federal gov. In fact, without the gov pork many would not have been built. The feds dip into the road tax revenue all the time to hand it over to another agency. Everybody has their face in the trough. This article is not really accurate nor fair handed. But let me say I love electric cars even though we pay through the nose to subsidize them. They are helping drive down the cost of gas. I am looking forward to the day when a normal sized SUV(explorer?)can be run on sparky.

  • eveee

    The Vancouver Study is interesting. Bikes win out massively. Driving is subsidized massively. One dollar spent by a commuter is backed by about ten subsidy dollars. Biking is penalized massively. A dollar spent on biking gets 8cents of subsidy.

  • Great article. Thanks, Mike. Thanks also to Vancouver and George Poulos of Discourse Media.

  • Michael DeAbreu

    The cost-benefit analysis of healthcare costs has long been a feature in setting air pollution mitigation policy. In Canada, this makes sense in that every dollar spent reducing air pollution saves dollars is avoided health care costs. But is this true in the United States where health care is a private expense? There is no off-setting tax benefit.

    • Public health is still governmental expenditure in the USA and lost productivity due to illness whether personal or of family members is a societal cost.

      • neroden

        The US government spends more per person on health care than any other country in the world, *even though we don’t actually provide health care to the majority of the population*. Our health care non-system is obscene.

  • Knetter

    Anyone want a “good” as in piss poor read, and the comments; well the comments are special.
    http://dailycaller.com/2015/12/30/paper-scientists-still-cant-explain-the-grand-hiatus-in-global-warming/

    • Brent Jatko

      It’s not worth printing out except as toilet paper.

  • Damien Vigneron

    In Europe taxes on gas are high. In 2016 the French government will install Linky among individuals. Linky is the electric meter connected designed by EDF, the electricity monopoly supplier company . thanks to that the tax on electricity will be increased for refills of electric cars at home . I think that the same pattern will apply in other countries across the developed countries.

    • neroden

      Attempts to increase electricity taxes will backfire massively. Why? Home solar panels. Attempts to tax home solar panels will make people *mad* and quite likely get governments overthrown.

  • DdavidD

    Well done – I think the American politicians that are trying to levy taxes against the ‘freeloader’ EV drivers are motivated only to protect the oil/coal industry – even at the cost of the health of their own constituents.
    EV drivers should, instead, be REWARDED for being early adopters of technology that very well may save the planet.

  • Steven F

    One thing I don’t see mentioned is that road damage is proportional to the weight of the vehicle. The heavier the vehicle the greater the damage it does to the road. Most of the damage done to our roads is caused by trucks

    http://truecostblog.com/2009/06/02/the-hidden-trucking-industry-subsidy/

    • Jenny Sommer

      And most of the polution too.

  • kvleeuwen

    How is electricity taxed in North America?
    Here in NL, electricity is taxed more (per kWh) than gasoline.
    You can’t blame an EV that it gets further on a kWh…

  • Richard Poore

    Wonder how the numbers compare for Europe, where the fuel taxes are considerably higher. Lack of funding for roads may be more of a concern for locations with higher taxes.

    • It’s an interesting question. I did a bit of research and it’s a lot more. Right now it appears as if Europeans are paying about $3.50 per gallon in gas taxes, more than seven times more than Americans. Further, they appear to be driving about the same distances annually, which surprised me as I had assumed that they would be driving less. Wrong assumption on my part.

      Thankfully someone did all of the math already. European road taxes of various types more than pay for the roads and are used to subsidize other public programs.

      http://www.citylab.com/commute/2013/09/these-2-charts-prove-american-drivers-dont-pay-enough-roads/6917/

      • Richard Poore

        Hmm, so that would mean that Europe is probably going to need to look at taxing EV much more quickly than in the US. Particularly if they depend on the fuel taxes for supporting other programs as well… might become a bit of an issue as the number of EVs become significant.

        • Norway is already running into impacts which isn’t surprising given the penetration. The only one I’m aware of is a toll tunnel to an island which provides free passage to electric cars finding the economics challenging but if I’m aware of one instance I’m sure there are five or ten situations already.

          • Jenny Sommer

            Some other things are different in Europe too. Much less people die in traffic accidents in Europe. Actually about half as much.

          • Very likely based on the latest empirical data on road safety. The US and Canada based road design on an assumption that roads would experience fewer accidents if they were wide, lanes were wide and there were few obstructions near the road. Empirically, what has been found is that drivers just drive faster so exceed the limits of their vehicles and have less time to react, so accident rates and severity increase.

            This was possible in many parts of North America because there wasn’t any built infrastructure to speak of and development occurred with the automobile in mind. This obviously wasn’t the case in Europe with some exceptions, as cities already existed and roads were narrow because buildings pre-existed cars.

            Now, North American road safety people are catching up to what Europe has accidentally: narrower roads with more obstructions and narrower lanes make drivers slow down and drive more cautiously more of the time, leading to fewer accidents and less severe accidents.

            http://www.theatlantic.com/health/archive/2015/02/to-make-roads-safe-make-them-feel-dangerous/386336/

      • Jenny Sommer

        Are you sure about the km/a? Germans drive ~14000km/a. That’s almost 50% less than Americans.
        I could not find the EU average but here is another interesting bit.
        Average km per citizen.

        http://m.diepresse.com/home/panorama/oesterreich/707764/index.do

        And just for the fun I found something about average distances driven by Leaf owners.

        http://mnewsroom.nissan-europe.com/uk/en-gb/Media/Media.aspx?mediaid=128282

  • vensonata

    Highway tax should be a general universal tax. Whether you drive a car or not, the entire society can not function without roads. “No man is an island”. But without tax, gasoline is too cheap… cheaper than bottled water, that is a tragedy. The obvious thing to do is what they did with smoking. Ban it in all public places. A twenty mile combustion free radius around all cities should be enough to reduce gasoline use by 90%. Don’t laugh, London is on its way to that. Hybrids are the bridge but they must have 50 mile minimum range. All urban truck traffic must also have electric city motors.

    So never mind the gas tax issue, it should always have been a universal infrastructure tax on all citizens with an income.

    • neroden

      Gas tax should be used to pay for the horrible pollution effects of gasoline. Which means it should be quintupled, at least. (In the US.)

  • JamesWimberley

    It’s unfair to count the accident savings from autonomous cars – they aren’t there yet. It’s not clear whether driver assistance as with current Teslas makes a significant difference.

    Regulatory and tax breaks for evs and renewable energies are proxies for the carbon tax we don’t have, and probably never will. Eventually evs will have to pay for roads, since there won’t be any ICES to fund them through gas taxes. But no hurry.

    • Martin Winlow

      “It’s not clear whether driver assistance as with current Teslas makes a significant difference.” Well, that’s true… but how many accidents have been reported thus far since Tesla’s AP was unleashed which have put the blame on AP? I would be very surprised if there had been any and we didn’t get to hear of it. You know what a hoop-la the media loves to make out of such things. Given that we have had AP for a good month now, how many SHOCK, HORROR ‘Tesla AP Causes Crash’-type headlines have we had? Er…, none? Implication is, AP is already making a big difference in the stats… but let’s wait and see!

      • Jenny Sommer

        But we don’t hear about every burned out Tesla either.

        • Bob_Wallace

          We don’t? If we don’t then how would you know?

          • Jenny Sommer

            Maybe you do? I might not read the right pages. I don’t read about burning Teslas on CT.
            Maybe these reports an pictures are hoaxes?

          • Bob_Wallace

            Some of the press loves to talk about Tesla problems. A recent WSJ article opened with, paraphrasing, “several Teslas have burst into flames when the cars ran over something in the road”. Several, in this case, was two.
            I find it hard to believe that there has been a single fire involving a Tesla which has not been reported.

            I can think of only a few Tesla fires to date and all have been discussed on CT. The two road debris fires, the high speed crash fire, the garage fire which was found to be a problem with garage wiring, and this one at a Supercharger.

        • neroden

          We’ve heard about every single Tesla fire ever. I believe there were four, including the one which caught fire because it was in a garage which was on fire, and three collisions (all prior to the “titanium shield”).

  • Marion Meads

    I’m in favor of road tax for all vehicles. The amount of tax is based on miles driven and weight class of the vehicle. This is to help maintain roads, including those roads that are seldom used.

    In parallel, the price of gasoline should include the carbon tax, and in this tax, it should include the indirect societal costs, and the carbon tax should be independent of the road tax. The more you use gasoline or diesel, the more would be your taxes.

    • Agreed, it has to be miles driven. Having different taxes and administration for each fuel type is complex, unfair and duplicates administrative costs. More and more fuel types are coming to market which will make the current scheme a total mess.

      The same tax method/basis for everyone is the way to go. Miles driven overcomes diferent fuel types and different fuel efficiencies muddying the waters.

      • neroden

        Weight class is very important: road damage is proportional to the FOURTH POWER of the axle load. So almost all the damage is done by trucks.

        • Nobody said it isn’t. Once you know the miles driven, multiply by the rate for the vehicle and you are arrive at a fair tax.

          The problem comes when you try and tax different fuel types by various schemes and things get complicated, expensive to administer and unfair to one group of owners or another.

    • milliamp

      Add to that a tax to help fund the constant need to be militarily and politically involved in middle eastern conflicts.

  • Kyle

    This is literally one of the worst analysis I’ve ever seen. It is so biased towards electric vehicles and cherry-picks factoids to a level which should be embarrassing to the author and insults the intelligence of the reader. To rail against IC engines while simultaneously lauding electricity consumption and not acknowledging that there are serious externalities associated with electricity generation, which society also bares, is disingenuous at best and malicious at worst. The last two “points” about road noise and vehicle collisions aren’t even real points for crying out loud! Most traffic noise from freeways, etc. is from tires (not engines) and the tacit notion in your article that only EV’s could benefit from safety advances through autonomy is preposterous. Furthermore, the argument made by those concerned about EV’s not paying gas taxes (a concern I personally also believe is not worth worrying about) is ultimately a concern that the money for roads has to come from somewhere and that lost tax revenue is lost revenue no matter how you justify or rationalize it.

    • Null66

      No, manufacturers have tuned exhaust systems such that most engine noise is similar to tire noise.

      Ride a bike for awhile if you don’t believe me. Leafs are radically less noisy for a similar weight car. Or better yet test drive a volt…

      • Kyle

        Even if that were true, what would it matter if the engine noise sounds similar to the tire noise that you aren’t getting rid of either way? I own a hybrid (also have driven several Volts and EV’s) and am familiar with driving in electric mode and how quiet it is…at low speeds. But up those speeds and the tire noise quickly dominates. Either way, if the discussion has devolved to issues of noise then I think we have lost our way.

      • Steven F

        ICEs have engine noise plus tire noise. Tire noise is substantial at 50mph. If engine noise equals tire noise electric cars will be substantially quieter at freeway speeds because they don’t have any engine noise.

    • ano333

      “To rail against IC engines while simultaneously lauding electricity consumption and not acknowledging that there are serious externalities associated with electricity generation, which society also bares, is disingenuous at best and malicious at worst. ”

      Considering the source of the article, it is safe to say that the author believes we should not be fueling our EVs with anything but renewable energy. Furthermore, even using coal generation, an EV is much more efficient than a fossil fuel burning car.

      • Kyle

        Whether the author wants the EVs powered with RE is irrelevant to the fact that we don’t live in that world and that average carbon intensity is about 0.6-0.8 kg/kWh depending upon where in the states you live. As for your assertion about efficiency, you are wrong about an EV being “much more efficient than a fossil fuel burning car”. Efficiency numbers (well to wheel basis) are comparable between most EVs and a hybrid such as a Prius with carbon emissions per mile actually favoring the Prius under many location’s electricity carbon intensity.

        • JamesWimberley

          Please explain how this works. A large modern gas or coal power station is about as efficient as a heat engine can get. An ICE car is running almost all of the time in a suboptimal régime, braking, accelerating, idling. So an ev running on fossil electricity will have a lower carbon footprint than any ICE.

          The ev’s carbon footprint is already lower than this with a modest renewable contribution to the generation mix, which will rise over the car’s 20-year life. Intelligent grid management and domotics will lower it further – charging is already largely at night, when wind and legacy nuclear enjoy despatch priority.

          Finally, the health externalities are almost all dependent on urban vehicle use, swamping those of coal power stations with tall smokestacks. Shifting urban traffic to evs powered by coal electricity would by itself give large health gains, which are of course maximised when the whole chain is renewable.

        • sault

          Nope, studies that pick worst-case scenarios for EVs and best-case scenarios for ICEs come to that conclusion. Real studies have determined that EVs and the best hybrid vehicles have the same CO2 intensity in a few coal-heavy states like West Virginia and Kentucky. Everywhere else, EVs fare better and the grid is getting cleaner every day.

          I’d like to see your well-to-wheel studies saying that hybrids are as efficient as EVs. Considering that we don’t generate hardly any electricity from oil anymore, you start out by comparing apples to oranges with this approach. Different fuels have different problems, of course. This comparison breaks down further when you realize a lot of nighttime electricity generation from baseload plants or wind generators is wasted / curtailed or sold for near zero $ / kWh. Making use of that generation is better than wasting it or sending it further away from the generating plant to sell it to another market that can absorb the supply, is it not?

          Finally, EVs are the future and any car with an ICE is tethered to the past. We need to make the transition off of oil for a variety of reasons that have nothing to do with climate change or energy efficiency anyway. EVs also enable more renewable energy generation by providing a market for variable electricity supply and possibly grid services / storage in the future.

          Your argument is more akin to saying the 1-hp cars of the late 1800’s and early 1900’s weren’t worth developing because a horse was just as good. ICE cars have almost a century of development behind them while EVs are just getting started.

        • Dan Hue

          You’re comparing a technology that is about maxed out in terms of efficiency (Prius), to one we’ve barely started to scratch the surface (EV). The grid is getting cleaner every day, and even more important, the storage potential of EVs is going to be a major factor in the future, especially once V2G technology gets deployed. IMO, EVs will become a keystone of the electric infrastructure, so their encouragement is very welcome.

          • Null66

            In addition, it takes about 1/2 the electricity to process and deliver gas as it does to drive the same miss in a roughly equivalent EV.

        • eveee

          DOE has a page for this. Their page uses US national average 44.7% coal.

          http://www.afdc.energy.gov/vehicles/electric_emissions.php

          Thats already wrong. Its dropped.

          EIA shows coal 39%.

          https://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3

          There are sites you can compare an HEV with an EV by state, and this one allows comparison by zip code. Given the drop in US avg coal use, the EV is slightly ahead on well to wheels now.

          Both beat conventional ICE.

          I don’t think its fair to make the statement that EVs are not

          “much more efficient than a fossil fuel burning car”.

          Whether by GHG or fuel standards like mpge, EVs are superior to conventional ICE. HEV are not conventional ICE. They also will not benefit from continuing reductions in electricity GHG.

          The fact that the average EV has well to wheels equivalent to a Prius, the most gas efficient auto in the world does not prove that EVs are no better than ICE efficiency. On the contrary, its proof that the average EV is as efficient as the most efficient gas consuming vehicle, a hybrid. Other ICE fall far short.

      • Bob_Wallace

        Here’s my goto source for dealing with the ‘which produces the least CO2’ question….

        http://www.ucsusa.org/clean-vehicles/electric-vehicles/life-cycle-ev-emissions#.VoRCkfkrK00

        The numbers in each grid/region tell you the breakeven MPG for ICEVs. Of course those numbers will rise as grids green.

        • Cited in the article which Kyle already ignored. He’ll likely ignore this as well.

          • kvleeuwen

            The article claim “The underlying data from the Vancouver study shows that the portion of
            costs avoided by electric cars represent about 37% of the total”
            is not supported by the graph on the right of the claim.

            EVs do not change congestion, have roughly the same accident rate, have nonzero emmissions (even without the useless generation discussion, tyres and brakepads still wear out, so EVs have ‘just’ a 60% reduction in PM). So the reductions do not add up to 30%.

            Accident reduction by autonomous driving is not an EV virtue, as many commenters have already pointed out.

            Road wear may be more with EVs, the torque is addictive (my own experience) and the car is heavier due to batteries.
            I agree with the title, but the analysis leaves to be desired.

            Is electricity untaxed in North America?

          • eveee

            The graph to the right does not support the 37% number. Why does that matter? The link to the Vancouver study does.
            The graph to the right supports the average annual 12k cost.
            The Vancouver study does not add the autonomous feature as a benefit of EVs. The author made that comment because Tesla is leading the way with autonomous vehicles in their EV, a separate matter from the Vancouver results. That might have been the confusion. The business about collisions was not about an EV to ICE comparison directly. The point of that factoid was that gas taxes don’t pay for transportation. And none of those objections apply to the Vancouver study, There are some US electricity taxes, but they are minimal.

            Perhaps your complaint is more about the clarity of the article. IMO, the presented facts seem ok. The particulate matter from brakes is small compared to fossil fuel particulates, and I can’t see a huge difference in the brake particulates, either. One could argue that EVs will be less because they use regenerative braking. Its a good argument because EVs have pretty low brake wear.

            That is if you are not driving a P85D in successive ludicrous mode burn outs and stops.

    • Martin Winlow

      Well, the article may not be entirely unbiased but what interested me in the headline was the notion that, yes, ICEVs *should* be paying tax and no, EVs *shouldn’t*. This is simply because, the last time I heard, very little electricity on mainland USA is generated from imported oil – and it is securing that oil that costs the US a fair chunk of its US$3b annual defence budget. I am also very surprised that no-one else here has at least acknowledged this fact. I simply can’t believe all US residents can be so utterly deluded. Please say it ‘aint’ so!

    • Michael DeAbreu

      In any city centre I’ve ever been in, half the cars are idling at a red light while the other half are roaring away from one. To my ears, engine and exhaust dominate traffic noise. We don’t notice the sheer volume except by it’s absence. Cars with stop/start engines make it really obvious when the engine turns off and silence descends. But they seem even louder when the ignition kicks in to restart the engine.

      • Bob_Wallace

        A few weeks ago I was in Quito. On Sundays they don’t allow motorized vehicles into the historical part of the city (a few buses and people driving to/from their homes). The difference made by the lack of traffic noise is astounding. And the air is incredibly cleaner. It totally changes the feel of the beautiful old colonial section of the city.

        It’s a little taste of what our cities will feel like once we get petroleum off our roads.

  • Shiggity

    1) EV’s should pay road taxes

    2) The ICE Congress boys got a hold of this and increased what they should be paying 10-100x to make EV’s look bad on purpose.

    What they do is look at cost of driving formulas, then magically make the EV tax a number that just puts them over the cost of driving vs. ICE’s.

    SUCH COINCIDENCE! WOW!

    Robber Baron politics 101. When your business model starts losing, cheat.

  • globi

    Besides, once all cars are electric, road pricing can be introduced to pay for highways.

    Or can anyone tell me why we have lawmakers at all? If laws would not need to be adapted from time to time (for example, due to technical progress), what do we need them for?

  • stanson

    I think the article misses the big picture that as growth in electric vehicles shifts from being more of a novelty to mainstream, it’s going to create a shortfall in highway funding.

    In the US state where I live, 100 percent of the gas tax is dedicated to roads. True, the tax doesn’t cover the entire cost, but if covers a significant portion. Assuming the inevitability of many more electric vehicles hitting the streets, the lost revenue from the gas tax will become significant. Now is a good time to begin thinking about how to solve that problem.

    • Richard Foster

      Well, given we’ll need to spend less money on health-related illness from air pollution, there will be more money there.

      It is also reasonable to suggest that since EVs powered by RE are going to be far cheaper than our current FF landscape, perhaps there could be some small increases in income tax to help pay for shared infrastructure?

    • Matt

      No you missed the point. The USA gas tax has never funded the highways. It covered only a small portion of new construction. There has been a short fall for years.
      But you are correct we need to update the system.
      1) Double the gas tax then raise it 10% per year.
      2) Add a fee on all vehicles. Charged each year to get plate, based weight cubed and miles driven. That way the more you drive and the heavy the vehicle the more you pay. A 20x increase in weight gives a 9600x increase in road wear.
      So that massive semi should pay a lot more than a SUV which is more that a small car which is more than a motorcycle.

      • Frank

        And if the money collected exceeds what is needed for roads, then use it to pay for medical costs, and reduce some other tax. One last thing. Been on some really nice car lane wide paved trails that even include a barrier when going across bridges between you and car traffic in Florida. Made me realize that transportation infrastructure where I live is totally discriminatory against pedestrians and bicycles, and favors cars, which seems dumb. My favorite solution is a single full sized lane, wide enough for an ambulance.

        • Matt

          Yes, since bikes and walking is the best and cheapest (from a support stand point) a portion of the collect fee yearly fee should go to walk/bike infrastructure.

    • ano333

      “I think the article misses the big picture that as growth in electric vehicles shifts from being more of a novelty to mainstream, it’s going to create a shortfall in highway funding.”

      Then why not just raise taxes on something else? Bang, problem solved.

      And don’t tell me that it is unfair to decouple the tax from the usage of the road, because everyone benefits from roads even if they never leave their house…

      • neroden

        If you want to tax based on usage of the road, tax based on vehicle weight (*already done* at time of registration in most states) and mileage driven (read the odometer at registration time).

    • Umm, to quote myself from the article:

      “Let’s extend this saving over a decade of car life. That’s about $44,400 of societal value given back. That’s money that could be spent on hospitals or school or just not paid in taxes. Or even used to maintain roads and bridges, if someone wanted to do that.”

      Note that last sentence. The point is that freeing up the negative externalities created by internal combustion vehicles includes freeing up existing societal expenditures which could be allocated to road maintenance.

      That’s the bigger picture. The total cost to society of transportation goes down, so the money currently spent can be spent differently. There’s no need for additional taxes or revenues when you just use the ones you already have more efficiently.

      Maybe it’s only obvious to me.

      • Spencerforhire

        Like the article! Good Show!

        But I think your “$44,400 of societal value given back.” is about half the actual cost that is NOT incurred with EVs . .

        Harvard , Barcelona and Beijing have all found heavy traffic exhaust causes students to have half the cognitive memory than that of “clean” schools.

        Oil leaks damaging roads does not happen with EVs. .

        And the latest of my theory has recently been studied . . . Asbestos particles from brakes are causing problems . . which are greatly reduced by regenerative brakes on EVs

    • Charles

      … and there is nothing wrong with increasing taxes in other areas to make up the shortfall, once it becomes a problem. But while EVs make up a fraction of a percent of the market, there is no hurry. It’s more of an “accidental” EV incentive – rather than an actively implemented incentive (such as lower vehicle registration fees or upfront subsidies) it’s an incentive that just happens to be in place by default.
      Solving the problem doesn’t take much thinking – just increase any other tax (income tax, sales tax) by a tiny amount. Considering motorists will be paying less than a third as much to run their cars, the increase should be easily absorbed.

  • milliamp

    EV critics are often the first to point out that EV’s are currently expensive and the people who buy them are more likely to be well off which means your average EV owner today likely pays enough money in taxes already in a year to put that $263 figure to shame.

    • ano333

      This is my favorite criticism of EVs, always leveled by a conservative (someone who should be all in favor of “the rich” having nice toys)…

    • Martin Winlow

      And… Have you seen the prices of used EVs (LEAFs, I-MiEVs etc) recently? The notion that they are only for the rich is as silly as it is false. MW

  • Zorba

    Great analysis, will keep this one bookmarked as I’ve heard this argument quite often recently.

  • evfan

    Way to go Vancouver! Make those external societal costs visible. The hidden subsidies for oil and gas industry should be part of this conversation.

    Also. I hope in “infrastrucrure” costs they figured in parking. Few folks realize this, but cities spend a great deal of money to pave acres of roadway, and a good chunk of that is used by all of us to park our cars, and we take street parking for granted.

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      • evfan

        Please remove your garbage from this thread

    • JamesWimberley

      IIRC there are substantial tax breaks for businesses to offer employee parking. It’s bad policy: but not tied to ICEs. Long commutes and downtowns emptied of life by parking lots are bad news even when the vehicles are electric.

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