Mark Phelan: Are drivers of electric cars saints or freeloaders?
Sunday, July 7, 2013
Are drivers of electric and hybrid cars saints who reduce fuel use, emissions and global warming? Or are they freeloaders who aren’t doing their part to pay for the roads and bridges they use?
That question, along with whether and how to encourage fuel-saving technologies, is at the heart of a debate over new taxes on electric and hybrid vehicles.
A growing number of states are considering extra fees to offset the fact that the vehicles’ low fuel use reduces income from gasoline taxes and contribute less to road funding than gasoline-only models.
Virginia levied a $64 annual fee on hybrids and electric vehicles July 1. A $100 annual fee for electric and hybrid vehicles took effect in Washington state earlier this year. The fees are in addition to the standard registration cost.
The Alliance of Automobile Manufacturers opposes the idea, arguing it makes drivers less likely to buy advanced new vehicles that reduce pollution and fuel consumption.
Even as some states raise taxes, the federal government and many other states offer large tax incentives to encourage drivers to switch to hybrids and EVs.
Michigan lawmakers considered an extra $75 fee on hybrids and electric vehicles earlier this year. They discarded the idea because they thought it would discourage new technologies and production of fuel-efficient vehicles. Arizona, Colorado, Oregon and Texas are all considering new taxes or fees, according to Green Car Reports. The proposals range from fees on hybrids and EVs to extra charges for all high-m.p.g. models or a usage fee based on how many miles one drives each year.
The way most states pay for road maintenance and construction doesn’t work any more. As fuel efficiency rises, income from per-gallon gasoline taxes hasn’t kept pace with the wear and tear on roads.
Michigan’s revenue from gas taxes declined $100 million from 2001 to 2011, according to the state Department of Transportation.
“Be careful what you ask for; you may get it,” John Voelcker, Green Car Reports senior editor, said of the unintended consequence from encouraging higher fuel economy.
The Michigan Infrastructure and Transportation Association, an arm of the construction industry, supports the fees.
“A Chevrolet Volt may only pay $10 a year in gasoline tax,” versus around $90 for a comparable gasoline car, MITA Vice President Mike Nystrom said. “You’ve got to make that up somehow. The (road) system is paid for by user fees. We have to embrace new technologies, but also recognize that these vehicles still have four wheels that run on our roads.”
Michigan’s 18.7-cents-per-gallon gas tax is relatively typical among states, which range from Georgia at 7.5 cents a gallon to California at 39.5, according to Gasbuddy.com. Michigan taxes diesel at 15 cents a gallon.
While drivers of hybrids, plug-ins and extended-range electric vehicles pay some gasoline tax, purely battery-powered electric vehicles like the Nissan Leaf and Tesla Model S are completely out of the tax structure.
“There’s nothing wrong with expecting folks who use the system to pay, but some of the proposals would have hybrids paying more than their fair share,” said Erich Zimmermann, senior analyst with Taxpayers for Common Sense. He argues new policies should tax all fuel-efficient vehicles fairly rather than singling out one class for different and higher fees.
Taxes targeting hybrids and EVs “don’t make sense long-term,” Zimmermann said. “It’s a slightly misguided approach.”
The Alliance of Automobile Manufacturers agrees.
“The alliance is unable to support a public policy that differentiates one vehicle from another,” spokesperson Wade Newton said. The alliance consists of BMW, Chrysler, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Porsche, Toyota, Volkswagen and Volvo.
“We want to see new technologies adopted,” Newton said. “We don’t want to raise another question when people consider advanced technology vehicles. We want these vehicles to be accepted.”