So I was reading an article on E10 and that got me thinking about this:
If & when EVs become a significant portion of the vehicles on the road, gas tax revenue will decline sharply and that point local governments will have to figure out some other way of generating income for things like road repairs.
This also got me thinking; EVs tend to be heavier than their ICE equivalents and so will this cause our road to wear out significantly faster?
Just some random thoughts on a Monday.
I imagine we will see taxes on electricity, causing those costs to go up.
The difference between a 3500 lb Camry and a 4100 lb Model 3 is negligible in terms of road wear. It's the 80,000 lb trucks that are the real contributors.
Some sort of alternative to the gas tax will have to be sorted out if we want infrastructure funds to be tied to use. That's not necessarily a terrible thing because gas taxes aren't high enough as it is right now - in Colorado, it hasn't changed since 1991 which means it's roughly half of what it was then in terms of actual spending power. On top of that, the fleet is getting more efficient so the revenues are dropping even further.
A lot of states have implemented a surcharge for EV registration, which is probably the best way to go. Taxing electricity further doesn't make sense because there are just too many other uses. I'd rather see that than a road usage charge which would basically involve an annual odometer check - or the "easy" solution of a connected dongle plugged into your OBD-II port.
Here's the CDOT view of how they want to proceed: https://www.codot.gov/programs/ruc/funding
Ohio registration is an extra $100 for hybrids and $200 for EVs. This is on top of the standard yearly registration of ~$30.
Some people are bitching about it, but I'm sure I pay more than $200 a year in road tax for my gas vehicles.
Just looked it up, ohio gas tax is $.385/gal. Thats ~520 gallons to hit $200, or less than 40 gallons a month. We easily hit that on the DDs back in normal times, now not so much.
I brought it up, somewhat ironically in the EPA crackdown on emissions delete devices. There's a possibility that the taxation would be done in a way that benefits the performance aftermarket with regards to low use vehicles. Somewhat ironically those who would benefit are resistant to the concept of their mileage being monitored or tracked, even if it potentially benefits them.
In reply to Dead_Sled :
If I found that right Illinois is $.392 per gallon of gas.
25,000 / 18mpg = 1,390 gallons.
$545 taxes I pay. I'm being generous with the 18mpg.
Add an extra $350 to get electric plates?
The next big thing is going to be per mile tax. Taxes paid based on miles traveled charged when you pay registration. That way EVs pay a portion that they would normally escape at the pump. Surely the gas tax will go away when this pay-per-mile thing hits.....
Just did the math - in our specific case, the extra $50 in registration is right about what we'd have paid if the Tesla was burning fuel at the rate of 40 mpg based on our annual use.
In reply to GeddesB :
There was talk of that here in PA, but I don't know how far it got. We've already got the second highest gas tax in the country, until New Yorks new one goes into effect, but all the gas tax money gets subverted to the state police and administrative costs. So they're trying to get people behind making more roads toll roads to raise what they should be getting from the gas tax. I'm sure they'll have wonderful annual toll increases like the turnpike does. Only another 23ish years of a 3% annual increase to go.
Oregon has a program (I think still something of a trial?) called OReGO, which you can opt into. If you do, you don't pay the higher registration charges for >40mpg vehicles.
There look to be three different third-party entities who do the "account management" of tallying miles on Oregon roads, and charging the 1.8 cents/mile road tax while refunding the 30 cents/gallon paid at the pump. Of the three entities, one only does GPS, one does no GPS but isn't EV-compatible, and a third offers OBD-with-GPS, OBD-without-GPS, and manual-entry options, though they note the OBD-without-GPS option is "best for vehicles driven only in Oregon."
It's not trivial, but it seems fairly complete and well thought out. Assuming our next vehicle is either an EV or an efficient hybrid, I'll definitely be looking into this.
Oregon has a separate uprated charge for vehicles over 26,000 pounds and their commensurate increase in wear and tear on the roads.
Nevada attempted to propose a road use tax as being fair but the voters balked at it. It was mostly driven by the fact that the folks proposing it attempted to increase the revenue generated....that didn't go over well.
The other issue was it adversely effected the people who were least able to afford it. Instead of paying as you went people would have to pony up the tax all at once. when you're barely making it month to month coming up with $200-$500 all it once was an issue.
The new infrastructure bill will allegedly make up some of the gap but only time will tell.
Alternate question: When EV's are more common than ICE and the taxes have shifted to registration or mileage based, with the tax on gas go down? Meaning, the cost of fuel will also go down? Maybe not because the demand won't be there for gas, so it'll become more rare. Although, with the huge infrastructure to support gas already in place, maybe it will go down significantly?
If that occurs, will we see a temporary swing back towards ICE because the fuel prices are lower until EV's match the dollar to value ratio of ICE? Kinda like the swing towards big SUV's and trucks when gas prices dropped a few years ago?
Although, EV's probably won't be the most popular vehicle choice until the used market for EV's catch up. The industry seems to focus on numbers for new, but most cars on the road were purchased used and the EV market for used (pandemic adjustments aside), don't even come close to used ICE vehicles. Until used EV's are as common and similarly priced as the equivalent ICE vehicles, ICW will still dominate.
Ninja edit: If it's OBD based, could you get a pass on the tax (or an estimate) if you don't have an OBD car? Would you see a slight bump in non-OBD car sales?
(No point or position intended, Tom1200 brought up and interesting idea that my brain started chewing on)
-Rob
Note that all non-OBD cars are now over a quarter century old, so that pool is shrinking and will continue to do so. I suspect it would either be ignored as background noise (as it is in some states for emissions purposes) or you'd have to undergo an annual odometer check (kinda like a sniffer test).
In reply to RevRico :
I'm in PA as well. The new spending bill that passed at the national level includes something to "investigate the plausibility of a per mile tax" or something like that. I expect it will happen sooner that later.
Keith Tanner said:Note that all non-OBD cars are now over a quarter century old, so that pool is shrinking and will continue to do so. I suspect it would either be ignored as background noise (as it is in some states for emissions purposes) or you'd have to undergo an annual odometer check (kinda like a sniffer test).
Shhhhh..... Don't kill my dream of starting a non-obd used car market with the tag line of "Don't pay the man on road tax, buy an old car today!!" :)
You're right, they are over a quarter of a century old at this point and dwindling quickly, just an extension of the thought exercise.
-Rob
I am against anything using a GPS. The government doesn't need to track me.
rob_lewis said:Alternate question: When EV's are more common than ICE and the taxes have shifted to registration or mileage based, with the tax on gas go down? Meaning, the cost of fuel will also go down? Maybe not because the demand won't be there for gas, so it'll become more rare. Although, with the huge infrastructure to support gas already in place, maybe it will go down significantly?
-Rob
The business model for gas stations will have to change significantly. They make most of their money in the convenience store. If the majority of the cars on the road are electric, they'll be more likely to replace the pumps with charging stations.
The idea of tallying up how many miles you drive seems unnecessarily complex to me. Usage based road tax was fine when it was easy in the form of a gas tax (although even there it didn't even come close to actually measuring the road use because of widely diverging fuel economies), but how many other government services are actually taxed based on the benefit an individual tax payer gets from it? Schools are traditionally funded out of property taxes, but the correlation between the value of real estate and the number of kids that are going to K-12 schools is not at all obvious to me. You don't pay a higher police and fire tax based off how many times you've called 911. Would it really be so bad to just dump the idea?
There is a $150 annual fee here, and the "letters to the editor section, which includes social media and all the other stuff" is full of letters demanding a removal, based upon the fact that they are morally pure, and taxes should only be paid by evil pricks.
Dead_Sled said:Ohio registration is an extra $100 for hybrids and $200 for EVs. This is on top of the standard yearly registration of ~$30.
Some people are bitching about it, but I'm sure I pay more than $200 a year in road tax for my gas vehicles.
That is state, counties add their own extra. Cuyahoga (Cleveland) totals $58 per vehicle IIRC.
Happy it is not like in states where registration is a property tax not a use tax, and have to pay $1000+ per year whether it is actually registered or not.
I'd have no problem paying $200/yr for an EV. I pay a little over twice that in state gasoline taxes. I also drive about twice the Accepted Average, so in that respect $200 is a common-sense number.
GeddesB said:In reply to RevRico :
I'm in PA as well. The new spending bill that passed at the national level includes something to "investigate the plausibility of a per mile tax" or something like that. I expect it will happen sooner that later.
I doubt it would be feasible. Vehicle inspection is done on a state and not federal level, and many states (mine included) have nothing that says a vehicle must have a functioning odometer.
Snowdoggie (Forum Supporter) said:I am against anything using a GPS. The government doesn't need to track me.
This wasn't posted from a smartphone, was it?
Pete. (l33t FS) said:GeddesB said:In reply to RevRico :
I'm in PA as well. The new spending bill that passed at the national level includes something to "investigate the plausibility of a per mile tax" or something like that. I expect it will happen sooner that later.
I doubt it would be feasible. Vehicle inspection is done on a state and not federal level, and many states (mine included) have nothing that says a vehicle must have a functioning odometer.
I'm not 100% sure of the PA inspection rules, but I know the inspecting station in PA writes the odometer reading on the window sticker. I would assume that info gets sent to PennDOT as well. It would not be a large leap to tie the inspection to registration renewal and you submit the inspection odometer reading with the renewal.
While an EV wouldn't need an emissions inspection, the annual safety inspection would still apply.
Any sort of mileage tax implementation will vary from state to state, but PA already has the logistical infrastructure to make it happen.
My classic cars don't get annual inspections, so a mileage tax wouldn't apply to them. Considering how little they are driven, probably not worth the digital paperwork anyway.
Randy, Streetfighter Supreme, level XI said:Snowdoggie (Forum Supporter) said:I am against anything using a GPS. The government doesn't need to track me.
This wasn't posted from a smartphone, was it?
That's okay, it's mostly for-profit companies doing the tracking.
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