Should electric vehicle drivers pay per mile?

Laura Bliss, CityLab

Since EV drivers zip past gas taxes, they don’t contribute to the federal fund for road maintenance. A new working paper tries to determine whether plug-ins should pay up.

More than 1 million electric cars are now zipping (quietly) around the United States. That’s still a tiny fraction of the nation’s 260 million-strong vehicle fleet, but EVs hit a sales record of 208,000 registrations in 2018. As more mass-market plug-in models hit the showrooms, more charging stations pop up, and the menace of “range anxiety” fades, new EV drivers are born every day.

But are all those Bolts, Volts, Leafs, and Teslas paying their fair share for the asphalt they drive on? The Highway Trust Fund, the federal government’s purse for road maintenance, depends on the 18 cents per gallon U.S. motorists pay in gasoline taxes. But it’s nearly insolvent, in part because Americans drive more fuel-efficient machines than before. So states like California, Washington, and Illinois are mulling a “mileage tax,” where drivers pay a fee based on the number of miles driven, rather than the amount of gas they burn. Oregon, where a pilot program asks participants to pay 1.7 cents per mile in lieu of paying a gas tax, is the example to follow.

Yet the question of getting plug-ins to pay up may be trickier than it seems. In a new working paper for the National Bureau of Economic Research, Lucas Davis, a professor of business and technology and a director of U.C. Berkeley’s Energy Institute, and James Sallee, a professor in the school’s department of agricultural and resource economics, estimate that while the U.S. does indeed forgo millions in tax revenue thanks to EVs, instituting a special tax on electric vehicles might produce unwanted side effects.