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With More Electric and Hybrid Cars on the Road, States Increase Fees

With More Electric and Hybrid Cars on the Road, States Increase Fees

Critics argue that the revenue raised isn't worth weakening the incentives to buy more environmentally friendly vehicles.

Governing.com
BY ELIZABETH DAIGNEAU | JANUARY 2019

General Motors may have pulled the plug in late November on its award-winning hybrid, the Chevy Volt, but electric vehicles (EVs) are far from dead. While they may only account for little more than 1 percent of all light-duty cars sold in the U.S. today, their share is quickly growing.

EV sales were on pace to top 1.6 million in 2018, up from just a few hundred thousand four years earlier. According to Bloomberg NEF, EV sales are forecasted to hit 11 million in 2025 and then surge to 30 million in 2030 as they become cheaper to make than internal combustion engines. By 2040, 55 percent of all new car sales and 33 percent of the global fleet will be electric.

As EVs become more common on America’s roadways, there are growing concerns that gasoline tax revenues will take a big hit. Those concerns have led some states to impose additional registration fees on electric and hybrid vehicles. In the past three years alone, 14 states have enacted annual fees ranging from $50 to $200. In total, 20 states do so, according to the National Conference of State Legislatures. “It’s an equity conversation,” says Kevin Pula, a senior policy specialist with NCSL’s transportation program. “States are trying to make up for lost gas tax revenue.” FULL ARTICLE

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