State fees, penalties on electric cars proliferate this year

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Feb 21, 2017

Stephen Edelstein

Several different states have continued to propose new fees for electric-car owners as a way to pay for road repairs. The fees are typically meant as a substitute for the gasoline taxes that, because they don’t buy gas, electric-car owners don’t pay.

Advocates have criticized these fees, saying they effectively penalize drivers for reducing emissions, and may dissuade potential buyers. Nonetheless, 2017 has already seen a flurry of new proposed electric-car fees.

Just since the start of this year, no fewer than six states have introduced bills that would add fees for electric-car owners, according to the Sierra Club. Those states are: Indiana, South Carolina, Kansas, Tennessee, New Hampshire, and Montana. None of the proposed bills have passed yet, but they would add to the ownership costs of electric cars in their respective states if they did. The Indiana bill, for example, calls for a $150 annual fee for electric cars registered in the state.

Several states have already implemented some form of fee for electric cars or hybrids, including Wyoming, Colorado, Virginia, Nebraska, Washington, North Carolina, Idaho, Georgia, and Michigan.

Georgia’s $200 fee replaced a program that offered buyers tax credits of up to $5,000, and electric-car sales plummeted 80 percent shortly thereafter, according to the Sierra Club. While officials often justify electric-car fees as a gas-tax surrogate, the group notes, even the tax itself no longer provides adequate funding for road maintenance. Because gas taxes haven’t risen since 1993, they currently only cover about 40 percent of project costs due to inflation since then, the Sierra Club says.

Raising taxes on anything, gasoline included, has become a perennial risk for elected officials. Some states have approved increases recently, however. Other states are studying alternative funding schemes that don’t discriminate based on a car’s energy source. Oregon previously implemented OReGo, a voluntary road-use fee that drivers of all types of vehicles can pay, and which the Sierra Club claims can save owners of internal-combustion cars money over a gas tax.

Massachusetts and Illinois have studied tax programs based on vehicle-miles traveled, while Wyoming has investigated basing registration fees on vehicle weight. Even when an electric-car fee is implemented, it can be a tool for promoting increased adoption.
Working with electric-car advocates, Colorado legislators created a system in which revenue from fees is split between an infrastructure fund and a fund used for public charging stations.

As the Sierra Club has noted in other efforts, legislation is far from the only obstacle to increased electric-car adoption. Last year the group conducted a survey of car dealerships, and found that most are not well equipped to sell electric cars at the same volumes as internal-combustion models. It suggested that automakers help dealers stock more cars, educate staff, and increase advertising. It also called on state legislatures to create robust incentive programs for both individual buyers and businesses. Those findings highlighted an uncomfortable truth: whether proposed legislation is friendly or adversarial to electric cars, it will be hard to boost adoption rates if dealers aren’t enthusiastic about selling them.


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About The Author - Jeremy Smithson

Started Puget Sound Solar in 2001 with 30 years of construction contracting experience, and a desire to turn Seattle on to solar energy. Achieving NABCEP certification in 2004, Jeremy believes that our customers often follow a path similar to the one he took, starting out with solar daydreaming, then progressing to education on the subject, and eventually leading to action. In addition to leading the company he also does some teaching and speaking engagements about various aspects of solar energy, and experiments relentlessly with various solar, energy efficiency, and electric vehicle projects.

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