Starting this month, a one-time upfront registration fee of $100 will be charged for 2020 model year plug-in vehicles in California. That will be followed by an annual registration fee of up to $175 based on the vehicle’s value. The Golden State is by far the biggest market for electric vehicles in the United States.
The fee is a result of Senate Bill 1, which passed in 2017. The bill also boosts California gas taxes by 3.2 cents to about 50.5 cents a gallon, raising approximately $7 billion a year to pay for maintenance and repairs. California EV fees are expected to generate $52 billion over 10 years, earmarked for infrastructure repairs.
EV fees will not make up for shortages in roadway investments caused by other factors. At the same time, University of California Davis researchers found that imposing EV fees in California could reduce their sales by 10-24%. The state currently has about 700,000 EVs on its road. In 2018, former governor Jerry Brown signed an executive order committing the state to a goal of 5 million zero-emission vehicles on the road by 2030. The state currently offers a rebate of $2,000 for a pure electric vehicle and $1,000 for a plug-in hybrid.
An EV worth $5,000 will pay a $25 fee. The amount climbs up to $175 per year for a plug-in electric vehicle worth $60,000 and higher.
States across the country are reeling from a loss of gas tax revenue during the pandemic. As a result, states are deferring billions of dollars of transportation projects. The shortfall is estimated at $50 billion needed to pave roads, maintain bridges, and other work to increase safety and decrease congestion.
According to the American Road and Transportation Builders Association, about $8.5 billion of work planned in 14 states and 19 localities were delayed or canceled.
On July 1, the US House passed a $1.5 trillion infrastructure bill that would increase spending on roads and transit while reducing pollution and generating jobs. (It also includes measures to update US postal trucks.) Senate Majority Leader Mitch McConnell (R-KY) dismissed it as “political theater.” The Republican-controlled Senate has yet to finalize its five-year transportation bill.
Nearly half of US states impose fees on EV owners or will soon add new. The ill-conceived idea is to make up for gaps in roadway infrastructure investments usually derived from gasoline taxes.
On January 1, EV drivers in Oregon started paying $110 more per year to register their EVs. The increase lifted their registration fee to $306 for two years.
The list of states with EV fees currently in effect, or about to start, include Alabama, Arkansas, California, Colorado, Georgia, Idaho, Illinois, Indiana, Iowa, Michigan, Minnesota, Mississippi, Missouri, Nebraska, North Carolina, North Dakota, Ohio Oregon, South Carolina, Tennessee, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.
As a 2019 article by CalMatters made clear, the shortfall in transportation funding is not caused by EVs, which still represent less than 1% of cars on the road. The root cause is stagnated fuel taxes, a misplaced priority on highway expansion, and broad improvements in vehicle efficiency.
Moreover, the time to raise gas taxes is when pump prices are low. It’s gas-powered cars that represent 99% of road use while producing countless dollars of adverse health impacts from tailpipe pollution.
Increasing EV registration fees do nearly nothing to help with infrastructure. At the same time, the fees undermine the state’s goal of putting more zero-emission vehicles on the road.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.