Gas taxes pay for the upkeep of our roads, but electric cars don’t use gasoline.
The end of 2019 saw a bunch of headlines proclaiming that it was a huge year for the electric vehicle. Yet more declare that actually, 2020 will be the year the EV really takes off. It’s true there are now more EVs; plug-in hybrid ones, battery ones, and even hydrogen fuel cell EVs in a range of shapes, sizes, and prices, and five of them made it into my list of the 10 best things I drove last year. When the numbers for 2019’s plug-in EV sales are complete, we expect more EVs to have been sold in 2019 than any year before, even if total new car sales in the US have dropped.
Still, let’s not get ahead of ourselves; EVs might be outselling manual transmissions by nearly 2:1, but they still account for little more than a rounding error in the context of ~17 million new car and truck sales. If that has you depressed, take heart that the trend for EV sales is moving in the right direction. And it’s a trend that is starting to worry some of the states. That’s because the US has traditionally paid for the upkeep of its roads via direct taxation of gasoline and diesel fuel, which means that as our fleet becomes more fuel-efficient, that revenue will drop in relation to the total number of vehicle miles traveled each year.
Utah tries something new
As a result, some states are starting to grapple with the problem of how to get drivers to pay for the roads they use in cars that use less or even no gas per mile. At the start of this year, Utah has begun a pilot Road Usage Charge program, coupled to an increase in registration fees for alternative fuel vehicles. Assuming a state gas tax of 30c/gallon and 15,542 miles/year driven, Utah says it collects $777 a year from a 6mpg heavy truck, $311 from a pickup getting 15mpg, $187 from a 25mpg sedan, $93 from a 50mpg hybrid, and nothing from anyone driving a battery EV.
So in 2020, Utah is increasing vehicle registration fees. In 2019, registering a BEV in Utah would cost $60; in 2020 that will be $90, increasing to $120 in 2021. PHEV fees were $26 in 2019, increasing to $39 this year and $52 in 2021, and not-plug-in hybrid fees have gone from $10 to $15, increasing to $20 next year. An extra $30 a year—or even $60 a year—is pretty small in the grand scheme of things, particularly considering how much cheaper an EV is to run.
But Utahns with EVs have an alternative. Instead of paying that flat fee, they can enroll in the pilot program that involves fitting a telematics device to the car that tracks the actual number of miles driven on Utah’s roads, or use an API from Smartcar to report mileage that does not require adding hardware. These are billed at a rate of 1.5c/mile, but only until the total equals whatever that year’s registration fee for the vehicle would have been; participating in the pilot means you could pay less than you would otherwise, but Utah’s Department of Transportation says that participants would not ever be charged more than that year’s registration fee. The data will be collected by a contractor called Emovis, which operates toll roads around the US. MORE