A research report submitted to the California Legislature this week by the University of California, Davis’ Institute of Transportation Studies proposes switching EVs to a mileage-based road-funding fee (road user charge, RUC) while continuing to have gasoline-powered cars pay gasoline taxes.
The report, “Assessing Alternatives to California’s Electric Vehicle Registration Fee,” was requested by the California Legislature. . . .
As more people drive EVs, gas-tax revenue for road repairs is dwindling. To address the shortfall, many states, including California, have opted to charge an extra registration fee for electric vehicles.
That approach is not a sustainable or effective solution, according to report author Alan Jenn, a UC Davis research scientist with the Plug-In Hybrid & Electric Vehicle Research Center.
- We find that the registration fee is not a sustainable mechanism to provide adequate funding as California transitions towards ZEVs. Additionally, the fee detracts from the market adoption of ZEV technologies by as much as a 20% decrease in new ZEV sales. Lastly, we examine alternative funding mechanisms include a fuel tax for hydrogen and electricity, as well as a road user charge (RUC). We find that a ZEV exclusive RUC is the most promising alternative to the ZEV registration fee.
—“Alternatives to California's Electric Vehicle Registration Fee”
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The report finds that the annual registration fee for ZEVs suffers from several major drawbacks related to funding and equity:
- Infrastructure will become drastically underfunded with the current registration fee, given the long-term shift towards ZEVs. Assuming 5 million EVs on the road in 2030, the current registration fee and gasoline tax would together lead to a decrease in infrastructure funding by more than $500 million annually.
The fee penalizes plug-in hybrid electric vehicles, which must pay both the registration fee and the current gasoline tax (for any gasoline consumed).
Owners of ZEVs would pay more under the registration fee compared to what they would equivalently pay with a gasoline tax (if electricity/hydrogen were converted to gasoline on an energy basis).
A flat $100 fee is disconnected from usage and the “user pays” principle; a ZEV owner would pay the same amount no matter how much they drive—directly in contrast with a gasoline tax which is based on usage. . . .
