Goodbye to the free ride for EVs?

According to a story from USA Today.com, several states are considering an annual fee on electric vehicles to compensate for the loss of gas tax revenue. Among the proposals are:

• Washington State is considering a flat $100 per year fee.
• Oregon is considering charging electric vehicle and hybrid drivers a fee based on the number of miles they drive.
• Mississippi and Texas considered plans similar to Oregon, but the legislation was withdrawn due to opposition.

Certainly, a methodology for maintaining critical road and bridge infrastructure is necessary, especially since EVs and hybrids create wear and tear too. My question is whether a flat fee is the best idea and whether now is the best time to impose such a fee?

Here are a couple of incremental ideas to consider instead of the flat fee or a year-end odometer reading.

• Since the electricity used by EVs is not free and there are state taxes of one form or another already incorporated in to electricity billing costs, perhaps levying a monthly fee into the utility bill of EV owners based on electricity used would be an worthy option. This would seem easier than relying on year end odometer readings or getting a large flat fee bill all at once like Washington State is considering. Looking at my current utility bill, I will be paying $6.12 in sales tax. It would not be hard to apply the the applicable sales tax associated with electricity used for recharging an EV toward road and bridge projects.

or

• Motor pool vehicles at my office have a card and code that we enter each time we fill up one of the vehicles. Among the data we enter, is the vehicle mileage. A similar method could be use when using recharging stations. Then the tax on the electricity used could be included in the monthly utility bill.

In regards to the timing of the fee, I think there should be a threshold of EVs on the road that must be reached before such taxes are first imposed. Otherwise, we might be creating an unnecessary impediment to quick and early adoption of EVs. My proposal would be to eliminate oil company subsidies and use a portion of that savings to offset the early stage ramp up of the EV market.  Once EVs reach five percent of the market based on sales, then begin to introduce the necessary taxes to assure a safe and modern system of roads and bridges.

I certainly do not have all the answers. So, if you think you have a better solution, please feel free to send it to us here at Progressive Blogic. We would love to hear from you.