Industry News: House Republicans Propose Electric Vehicle Fees to Fund Transportation Programs

[G. David Felt]

House Republicans, lead by Sam Graves, Republican for Montana and head of the House Transportation and Infrastructure Committee are proposing a $250 annual charge for electric vehicles as part of an effort to shore up funding for the national highway system and other transportation projects. Graves stated that with the increase in electric, hybrid and just overall efficiency in internal combustion automobiles that the federal tax collected per mile traveled has dropped, making it a challenge to keep the Federal Highway Administration funded. With the new fees, Republicans hope to raise $50 billion in new funding over the next 10 years. The additional money would go to pay for highway repairs and additional funding for air traffic control. Republicans point out that since 2008, more than $275 billion has been shifted from the general fund to pay for road repairs. 

The federal government has not raised fuel taxes, currently 18.3 cents per gallon, since October of 1993.

The latest proposed fee schedule would be $250 per electric vehicle per year and $100 per hybrid-vehicle per year. An earlier proposal had the electric vehicle fee at $200 per year and also included a $20 per year fee for gasoline and diesel powered vehicles.  The Federal fee would be on top of any state fees imposed. Many states have adopted EV fees to replace the loss in gas tax revenue at the local level.

The federal fees are tied to inflation and would be recalculated each year and grow over time.

The U.S. Energy Information Administration has pointed out that the proposed $250 fee would require the average EV owner to pay the equivalent 1366 gallons gas tax while hybrid owners would pay roughly the equivalent of 547 gallons of fuel tax on top of paying 18.3 cents at the pump. For an EV owner, they would be paying as much tax as someone driving 15,000 miles per year in an 11 mpg vehicle.

The average amount of gas used by non-hybrid gasoline vehicles is roughly 489 gallons per year.

This latest proposal comes just two months after the House attempted to propose a bill that would have killed the Biden-era electric tax credit system and funding for manufacturing of batteries to EVs. With state republicans worried about billions that would be lost due to killing of the IRA bill, house republicans have focused on how to make everyone pay more into the federal system. The GOP says it is only fair that Hybrid and Electric vehicle owners pay their fair share into the federal Highway Administration department.

 

View full article

[smk4565]

Bad idea for 2 reasons.   First the avg amount paid in gas taxes for a person is about $100 a year, so you are penalized for a hybrid or EV.  Second, if you are someone who doesn't drive much, or has a couple cars, maybe a fixed income senior with a Chevy Bolt that drives 4,000 miles a year, now you are paying $250 to drive 4,000 miles vs about $20 in gas tax.

[Drew Dowdell]

1 hour ago, smk4565 said:

Bad idea for 2 reasons.   First the avg amount paid in gas taxes for a person is about $100 a year, so you are penalized for a hybrid or EV.  Second, if you are someone who doesn't drive much, or has a couple cars, maybe a fixed income senior with a Chevy Bolt that drives 4,000 miles a year, now you are paying $250 to drive 4,000 miles vs about $20 in gas tax.

@smk4565with all the good points lately!

I also think that $50b over 10 years in new funding isn’t enough to cover the deficit the Highway dept is facing. If they’ve had to do $275b over 18 years, the math doesn’t add up.

[smk4565]

1 hour ago, Drew Dowdell said:

@smk4565with all the good points lately!

I also think that $50b over 10 years in new funding isn’t enough to cover the deficit the Highway dept is facing. If they’ve had to do $275b over 18 years, the math doesn’t add up.

I could see maybe if they add a $250 federal tax on all new car purchases as a 1 time fee.  But to charge it every year is both a ripoff and unfair.  Fast forward 20 years and 90% of cars might be EV, so the fund roads through gas tax will be totally obsolete.  And it will be a tax more so on lower income and working people.  And the gas tax basically works that the college student driving a 10 year old Corolla because that is what they can afford, will pay the same road tax as a pro football player in an Escalade.

 

[G. David Felt]

One, EVERYONE needs to write their House and Senate representatives on this and make sure they are aware of this very imbalanced approach to funding a government department.

With that said, I do not mind paying an equal share for my EV on the roads. Yet if they are going to charge me $250 then it is time to raise the gas tax equal to what Hybrid and EVs must pay.

ICE = 489 gallons of gas X .183 cents per gallon = $89.49 cents per year based on the Governments only numbers.

If they are to charge EVs $250, then they need to raise the Federal gas tax to .511 cents per gallon for equality.

[G. David Felt]

FYI - Using this story and my thoughts above, I wrote my House and Senate representatives on this and this is what I sent them:

 

Hello Suzan, Patty, Maria,

Sam Graves, Republican for Montana and head of the House Transportation and Infrastructure Committee is proposing a $250 annual charge for electric vehicles as part of an effort to shore up funding for the national highway system and other transportation projects. Graves stated that with the increase in electric, hybrid and just overall efficiency in internal combustion automobiles that the federal tax collected per mile traveled has dropped, making it a challenge to keep the Federal Highway Administration funded. With the new fees, Republicans hope to raise $50 billion in new funding over the next 10 years. The additional money would go to pay for highway repairs and additional funding for air traffic control. Republicans point out that since 2008, more than $275 billion has been shifted from the general fund to pay for road repairs. 

The federal government has not raised fuel taxes, currently 18.3 cents per gallon, since October of 1993.

The latest proposed fee schedule would be $250 per electric vehicle per year and $100 per hybrid-vehicle per year. An earlier proposal had the electric vehicle fee at $200 per year and also included a $20 per year fee for gasoline and diesel-powered vehicles.  The Federal fee would be on top of any state fees imposed. Many states have adopted EV fees to replace the loss in gas tax revenue at the local level.

The federal fees are tied to inflation and would be recalculated each year and grow over time.

The U.S. Energy Information Administration has pointed out that the proposed $250 fee would require the average EV owner to pay the equivalent 1366 gallons gas tax while hybrid owners would pay roughly the equivalent of 547 gallons of fuel tax on top of paying 18.3 cents at the pump. For an EV owner, they would be paying as much tax as someone driving 15,000 miles per year in an 11 mpg vehicle.

The average amount of gas used by non-hybrid gasoline vehicles is roughly 489 gallons per year.

I do not mind paying an equal share for my EV on the roads. Yet if they are going to charge me $250 then it is time to raise the gas tax equal to what Hybrid and EVs must pay.

ICE = 489 gallons of gas X .183 cents per gallon = $89.49 cents per year based on the Governments only numbers.

If they are to charge EVs $250, then they need to raise the Federal gas tax to .511 cents per gallon for equality and tie it into inflation so that gas tax goes up just as the Hybrid / EV tax goes up.

With having to pull from the General fund $275 Billion to support the Federal Highway Administration, I find it a little odd that the estimated $50 Billion over 10 years really would make a difference compared to increasing the Federal Gas tax having everyone share in the responsibility to fund our inner state highway system.

I look forward to hearing from you,

Sincerely,
G. David Felt

 

FYI

2024 according to statista.com, 134.55 billion gallons of gas were sold for the year.

At .183 cents federal gas tax, that was $24,622,650,000 billion dollars collected in gas tax.

At .511 center federal gas tax, that would have been $68,755,050,000 Billion collected in gas tax in addition to the Hybrid and EV fee that would be collected for our inner-state highway system.