EV fee hikes will make road funding fairer

Last year, I asked “How should we pay for the roads?” I noted three sources of pressure on the state government’s sources of funding for the construction and maintenance of roads: inflation, improved fuel economy, and electric vehicles.

“According to the Minnesota Department of Transportation,” I wrote:

…the number of electric vehicles registered in Minnesota increased by 1,440% between 2016 and 2022, from 749 to 11,534, as Figure 4 shows. The state government wants to increase this further, so that “5 percent of light-duty vehicles registered in Minnesota [will] be EVs by 2025 and 65 percent by 2040.”

Figure 4

This presents two problems. First, these vehicles impose wear and tear on roads and bridges but do not pay the gas tax to cover it. Instead, EV owners pay an annual $75 fee in lieu of the state gas tax.

This isn’t nearly enough. The Federal Highway Administration reports that Minnesotans drive an average of 11,361 Miles per Vehicle annually with an average miles per gallon of 16.68. Working out average gallons of gasoline purchased (11,361 / 16.68 = 681.1) we can calculate that the average Minnesotan motorist pays $194 in gas tax annually (681.1 x 0.285 = 194), more than double what an EV driver pays in lieu.

Second, while contributing less than their fair share, electric vehicles actually impose more wear and tear on roads and bridges than conventional vehicles. The State Smart Transportation Initiative notes that while cars generally have got bigger and heavier:

“EVs exacerbate this problem due to the massive batteries they require. For example, an electric Ford F-150 Lightning weighs at least 1,000 pounds more than the standard F-150, one of the most popular vehicles in the country.  

…

This added weight and impact energy will also take a toll the country’s roads, bridges, and other infrastructure. A longstanding rule of thumb, called the fourth power law suggests even a modest increase in weight results in at least twice as much road damage. A 50% increase yields five times more damage.”

This extra wear and tear from vehicles which are not paying their fair share towards road and bridge maintenance is a source of pressure on budgets which will only grow if EVs become as prevalent as governments want them to.

This session, the legislature has taken some commendable steps towards fixing this disparity. Amid the flurry of bills passed in Monday’s special session were new taxes on electric vehicles, including a five-cent tax per kilowatt hour on charging and an increased registration surcharge for EVs and hybrids. The minimum fee will initially be $150 for full-electric cars and $75 for plug-in hybrids. 

We welcome these steps in the right direction.