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Other nations support electric cars. In the US, they’re supposedly a threat to gas tax revenue.
Posted on May 23, 2019 by Charles Morris
Governments in Europe and China are trying to speed up the adoption of electric vehicles by offering subsidies and incentives, and it’s working. In Norway, EVs are exempt from taxes, and drivers receive perks such as free parking and reduced tolls. Almost 60 percent of new cars sold in the country in March were fully electric. China’s combination of incentives and mandates is acting as a magnetic force, sucking the global EV industry out of America and Europe and into China, where over a million electric cars were sold in 2018.
Above: Tesla Model 3 in Guangzhou China (Twitter: Vincent)
Meanwhile, in the US, the official strategy now seems to be to slow down or stop the spread of EVs. The federal government has shifted into reverse gear, moving to roll back previously agreed emissions and fuel economy standards. The reversal is gathering momentum at the state level as well, as Bloomberg reports. In 24 states, EVs are now subject to additional annual fees - typically in the form of higher registration costs that can be as much as $200 per year. The National Conference of State Legislatures has published a map that details the various state fees around the country.
More states could soon join the anti-EV club. The Illinois legislature is currently considering a $1,000 annual registration fee for electric cars. (Illinois voters can contact Governor Pritzker’s office or their state legislators to comment on the proposed bill.)
“I suspect that behind a lot of these state efforts, there is a bit of an oil-industry push to slow the increase of EVs in the market,” Simon Mui, a Senior Scientist with the Natural Resources Defense Council, told Bloomberg, noting that the American Legislative Exchange Council, a lobbying group that advocates for pro-fossil-fuel policies, has supported EV registration fees.
Above: A sample of what other countries are doing around the world to encourage electric vehicle adoption (Chart: Stuff New Zealand)
However, it’s not a simple case of us versus them. Several of the states that impose EV fees also offer purchase incentives and invest in public charging infrastructure. The nation’s EV capital, California, giveth a rebate of up to $2,500 to EV purchasers ($4,500 for lower-income consumers), and taketh away a $100 annual registration fee. EV-friendly Washington, Oregon and Colorado also impose yearly fees.
Advocates of fees argue that EV drivers pay no gasoline taxes, which states rely on to maintain roads and other transportation infrastructure through taxes. “Like other consumers, electric vehicle drivers, who also cause wear-and-tear on our roads and bridges, should pay their fair share to help support American infrastructure projects,” Frank Macchiarola of the American Petroleum Institute lobbying group told Bloomberg.
This argument has its flaws - EV drivers fuel their vehicles with electricity, which is also taxed at the state level, and more fuel-efficient legacy vehicles are a far greater threat to gas tax revenues. It’s also worth pointing out that most states haven’t raised their gas taxes in years (the gas tax in Illinois has been 19 cents per gallon since 1990), and this has contributed to the parlous state of the country’s road infrastructure.
Above: Meanwhile, EV owners are offered significant incentives and tax breaks in countries like Norway (Image: Ecomento)
Be that as it may, not all of those advocating for EV fees are oil-industry lobbyists. “My feeling is that people using the system should pay for the system,” said Iowa Representative John Forbes, a Democrat who supported legislation that would phase in a $130 annual fee for EVs and a $65 fee for plug-in hybrids. Forbes says he owns a Chevy Bolt (as well as a Chevy Suburban).