Published Friday November 29, 2013:  Updated December 2, 2013

A Road Tax for Electric Vehicles?

Any vehicle that drives on a road, regardless of fuel type will inflict some wear and tear on that road. Historically, gasoline tax is collected to fund the maintenance and repair of roads.  

Heavy vehicles cause more wear and tear and use more fuel so a gas tax is a fair system.

Vehicles that drive more miles cause more wear and tear and use more fuel, so they are also fairly taxed. 

As vehicles get more fuel efficient it is logical that the tax on fuel needs to go up, since the vehicles are using less fuel but still inflicting similar wear and tear on the roads.  

Gas Tax:  

Currently in the State of Utah, the gasoline tax for federal and state total is $0.43 cents per gallon. In 1997 when this gas tax was set, it was 27% of the cost of gasoline.  Today, that same price fixed gas tax is only 13% of the current cost of gasoline. If you ask me, that is a pretty reasonable tax rate.  The problem is the gas tax has not kept up with inflation.  

I can understand that people are upset by a tax increase. But why aren’t they more upset at the other 87% of the cost, which is the gasoline itself. Or upset at why their car only gets 30 mpg instead of 130 mpg? This tax increase is tiny. Taxes are the cost of driving on a maintained road, period.  

You will save much more in fuel savings and reduced maintenance costs through buying a more fuel efficient car like a Honda Civic, a Toyota Prius, or better yet, a Nissan Leaf (yes, I'm a little biased toward Cheryl's Leaf but can you blame me)?    

But then what do we do about the all-electric vehicles?  They don't pay any road tax at all.  

Currently the percentage of EVs on the road is insignificantly small. But as more electric vehicles use the roads it will begin to throw off the gas tax system.  

My wife and I both drive electric vehicles. We use them for 99% of all our driving needs (from daily commuting, to shuttling the kids around and even trips to Logan or Park City on the weekend).  

Our family of 7 are contributors to road wear and tear, yet we really don’t pay our “fair share” of the road use taxes. The electricity we use to power our home and electric vehicles is all solar powered, so they can’t very well extract our “fair share” from the electric utility bill either.  While we are benefiting from this “temporary” loop-hole, this is a quandary that needs to be figured out before the masses “follow our lead” so-to-speak.

How do we apply a fair road-use tax that is proportional to the wear and tear of that particular vehicle driving on the road, regardless of fuel type? And how do you do it without violating driver privacy (like GPS monitoring of how many in-state miles you drove)?  

Keeping in mind that this is a road use tax and not an air quality tax, they really could base it off of just 3 factors: 

  • Actual miles driven
  • Energy used
  • Weight of the vehicle

Since ½ of the tax is federal anyway, maybe a tax at the time of vehicle registration is a good way to go. Other states would need to get on board with a similar tax to make it fair across the country.  

All commercially made electric vehicles keep track of average miles/kilo-watt-hour fuel economy data.  Based on this data and the odometer reading from the previous year, the government could charge a proportional road use tax at the time of vehicle registration.  

For the first year of driving a vehicle, they can base the fee off of the EPA rating and estimated miles to be driven. The following year, the fee would be pro-rated to the actual miles/kWh and actual miles driven.  Instead of a fixed cents/gallon or cents/kWh tax, it should be a percentage of the energy cost so it keeps on track with inflation.  

I would be willing to pay $100-$150/year per electric vehicle for my family's “fair share” of road-use taxes.  This is in line with what a similar sized gasoline car currently pays in road use tax.  

Granted $100-150/year is about the same as the cost of electricity to drive a Nissan Leaf 4,000 to 6000 miles but fuel costs aside, that's probably what it takes to cover wear and tear that was incurred to the road by driving that car.  

Next Article:  Goodbye Gasoline