TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Electric, hybrid cars cost states fuel taxes

Daily Photo Galleries

By Mark Phelan
Saturday, July 20, 2013, 12:01 a.m.
 

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-mpg 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 anymore. 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 about $90 for a comparable gasoline car, MITRA 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.

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.

Mark Phelan is the Detroit Free Press auto critic. He can be reached at mmphelan@freepress.com.

 

 
 


Show commenting policy

Most-Read Business Headlines

  1. Indian firm plans exports of ethane from U.S. shale fields
  2. EDMC to cut costs, roll out new grant
  3. Energy sector powers Pa. pace
  4. UPMC earnings turn positive, but pressures mount
  5. Auto sales increase along with subprime loans
  6. Sales, profit fall at retailer American Eagle Outfitters
  7. Sprint cancels Framily, rolls out new data pricing plan
  8. Obama weighs broader move on immigration solutions
  9. Target cuts annual profit outlook
  10. Discretionary purchases take off as consumer confidence shows strength
  11. Barnes & Noble, Samsung offer  co-branded tablet
Subscribe today! Click here for our subscription offers.