Electric Vehicle Fees – Key Considerations

In most states, EVs currently make up a tiny fraction (typically below two percent) of the light duty vehicles on the road. Nevertheless, more than 20 states have recently assessed (or are considering) new fees on EVs with the stated goal of offsetting declining conventional fossil fuel taxes. While the aim to have all vehicles contribute their fair share to the construction and maintenance of the roadways is understandable, it will be exceedingly hard to argue that EVs in the near future (even with high adoption) are a significant contributor to the fundamental transportation funding shortfalls. This white paper aims to inform debates on transportation funding policy by highlighting various tradeoffs, administrative considerations, and revenue implications inherent to the different policies.