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IUPUI Study: Electric Car Fees Won’t Solve Road Funding

Electric vehicles don’t pay into road funding the same way traditional vehicles do because they don’t pay fuel taxes.

Nissan Leaf

Photo: NCDOT (Flickr)

The Nissan Leaf charges at an electrical charging station. The Leaf is one of the car models that runs largely off electricity rather than gasoline.

Researchers say a flat fee on electric vehicles won’t help solve declining road funding revenues, like those faced here in the state.

Electric vehicles don’t pay into road funding the same way traditional vehicles do because they don’t pay fuel taxes. So, some states have imposed flat registration fees of $100 or $200 on electric vehicles.

But IUPUI professor Jerome Dumortier says his study shows that plug-in vehicles account for, at most, only about one-and-a-half percent of the decline in fuel taxes. And he notes that a flat fee is economically inefficient.

“Should a person who drives, say, a Tesla with say a thousand miles per year, should that person pay the same charge as somebody who has a Nissan Leaf and uses the car for commuting and drives, say, ten thousand miles per year?” he says.

Dumortier says a more impactful solution is what’s called a vehicle miles traveled, or VMT fe. Essentially, you’re charged based on how much you drive.

That’s an idea that Indiana lawmakers have discussed too, though Dumortier says much of the resistance comes from privacy concerns. Still, he says the entire road funding model needs to shift towards VMT.

Want to contact your legislators about an issue that matters to you? Find out how to contact your senators and member of Congress here.

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