California Considers New Taxes for Electric Vehicle Owners
California is exploring new ways to fund its roads as the number of electric vehicles (EVs) on the state’s roadways increases, potentially shifting the cost of infrastructure maintenance from gasoline-powered vehicle owners to EV drivers. The move comes as the state aims for carbon neutrality by 2045 and a ban on the sale of new gasoline-powered automobiles by 2035.
Currently, approximately 80 percent of California’s roadway maintenance funding comes from taxes on gasoline sales, , according to reports. As more residents switch to EVs, the revenue generated from these taxes is expected to decline, creating a potential shortfall in funding for road upkeep.
One proposal under consideration is a per-mile tax on all-electric vehicles. As of , the proposed fee would amount to roughly 2 to 4 cents per mile driven. This could translate to an annual cost of between $200 and $600 for the average driver, though the actual amount paid would vary based on individual mileage.
A pilot program to test the mileage charge was nearly completed by the California Department of Transportation (Caltrans), as confirmed by KMPH Fox 26 on . However, the initiative has faced some pushback from residents and activist groups, and implementation has been delayed.
David Kline, a spokesperson for the California Taxpayer Association, acknowledged the need for road funding but raised concerns about the fairness of a per-mile tax. “Someone’s got to pay for the roads. It should be the people who use the roads,” Kline told KMPH Fox 26. He also questioned how the tax would impact drivers with long commutes, particularly those in areas where cities are far apart, suggesting they could bear a disproportionate burden.
California currently has the highest number of all-electric vehicles of any state in the United States. In , electric cars accounted for 25.3% of all new car registrations in the state, a figure that remained consistent with the 25% registered in .
The discussion around EV taxation comes as federal EV tax credits are set to expire. California is considering ways to “backfill” these federal credits with its own incentives, such as point-of-sale rebates or vouchers, to maintain momentum in EV sales, according to a report released by the California Air Resources Board (CARB) on .
The state has a long history of setting its own vehicle emissions standards, dating back decades before the creation of the Environmental Protection Agency. California was granted a waiver in the Clean Air Act, allowing it to implement stricter regulations, and eleven other states currently follow California’s lead.
A recent analysis from Resources for the Future suggests that reversing federal support for EVs could impose a $33-billion cost overall. .
