The American Transportation Research Institute released research that describes a framework for electric vehicle taxation to support transportation infrastructure.

The federal fuel tax has not been raised since 1993, despite the need for an increase in highway trust fund revenue. Meanwhile, battery-electric vehicles are growing in popularity and do not contribute substantively to state and federal highway trust funds, ATRI explained. 

With numerous programs that subsidize the use of electric vehicles, the infrastructure investment deficit is exacerbated, ATRI officials said. ATRI’s analysis quantifies this revenue loss at more than $4 billion over the next 10 years.

Through a small tax on the electricity that is used in transportation, the report identifies an approach to connecting the growing number of U.S. electric vehicles with highway trust fund revenue streams.

The report suggests that U.S. electric utilities are well equipped to begin collection of a per-kWh charge of 2.1 cents for transportation-related electricity consumption in the coming years. Using a phased approach, utilities would identify, measure and tax electricity that is used for transportation – starting first with electricity that is dispersed through public charging stations and residential smart chargers.

The federal electric fuel tax concept has the potential to be collected using a small number of transaction points, while at the same time tying the tax to road use.

“A tax on electricity has the potential to achieve the same cost of collection efficiency as the gasoline tax,” according to the report.

“This analysis demonstrates how an electricity tax can easily emulate all the key components of a fuel tax. Moving forward with an efficient utility-based approach will help EV owners support the infrastructure that they use every day,” said Paul Enos, CEO of the Nevada Trucking Association.

Concern Over Disincentivizing Electric Vehicles

There are concerns that collecting user fees from EVs would act as a disincentive.

However, a 2.1 cent per kWh tax (which would be less than $1 per 100 miles for a typical BEV) would likely not dissuade someone from purchasing an EV, ATRI’s study suggests.