by California Considers a New Tax on Electric Vehicles
California has set an ambitious goal to achieve carbon neutrality by 2045. This path involves the mass adoption of electric vehicles, which means phasing out traditional internal combustion engine cars. Along with them, a significant source of funding for the state’s road infrastructure is also disappearing.
Anticipating a reduction in fuel tax revenue, officials are now exploring a new alternative: a mileage tax for electric vehicle drivers.
Currently, approximately 80% of California’s road maintenance budget is funded by the gasoline tax. For every gallon of fuel pumped at a station, about 61 cents goes towards maintaining the vast network of highways, freeways, and local roads in proper condition.
How Will Electric Vehicles Pay Their Share?
It is clear that as more people switch to electric vehicles, this revenue stream will slowly dry up. This is where a mileage tax could play a role. California recently completed a pilot program for such a tax, charging electric vehicle owners between 2 and 4 cents for every mile driven.
Theoretically, this is a straightforward way to recoup the funds needed for road upkeep without relying on fossil fuels. However, implementation may not be so simple.
First, creating and operating such a system could be quite costly. Second, drivers who accumulate significant mileage, often residents of rural areas or those with long commutes, could bear the brunt of the cost.
As noted, a commuter traveling daily between the cities of Hanford and Fresno could face costs of about $11 per week under the proposed system. Multiply that by a month or a year, and it becomes a noticeable new expense for people who may not have easy alternatives.
Then there is the question of how the state will track each vehicle’s mileage. One proposed method involves installing a tracking device that plugs into the car and records miles traveled.
This could quickly become expensive, especially if it needs to be deployed on every electric vehicle in California. And even if the technology is viable, it introduces another kind of cost – to driver privacy.
Many Californians would likely have legitimate concerns about such direct surveillance, especially if the data is handled by third parties or used for purposes beyond taxation. Balancing efficient tracking with privacy rights could prove to be a contentious issue.
Someone has to pay for the roads. It should be the people who use them.
However, there are concerns that a road tax could ultimately “shift the burden onto other people,” raising questions about whether some of those who have to travel long distances will be able to afford the new tax. This tension between fairness and practicality remains unresolved as the state contemplates its next steps.
The transition to electric vehicles inevitably alters the economic models that have supported infrastructure for decades. Finding new funding sources, such as a mileage tax, becomes a practical necessity, but it also raises complex questions of social equity and technological feasibility. The success of such initiatives will depend not only on their efficiency in raising funds but also on how fairly and transparently the public perceives them. California’s experience could become an important precedent for other regions of the world also facing similar challenges on the path to clean transportation.
