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States Losing Gas Tax Revenue with EV Adoption

States are losing gas tax revenue as motorists shift to EVs, and they're adopting various strategies to make up the missing funds. So far, efforts to tax electric vehicle drivers are voluntary, but that could change. US News & World Report By Jim Motavalli January 18, 2023

Electric vehicles take tailpipes off the road, reducing both local pollution and greenhouse gas emissions, but they also detour around state gasoline taxes—used to fund highway maintenance—and put a big hole in anticipated budgets. Lansing, Michigan-based Anderson Economic Group released a study on January 17 that concluded that Michigan could miss out on $50 to $95 million in annual lost revenue because of EV adoption. This is despite the fact that the state imposes a $140 fee on motorists who buy electric. A 2020 study in the academic journal Environmental and Energy Policy and the Economy concluded, “We calculate that electric vehicles have reduced gasoline tax revenues by $250 million annually. We show that the forgone tax revenue is highly concentrated in a handful of states and is highly regressive, as most electric vehicles are driven by high-income households, and we discuss how this motivates and informs optimal policy.”


View the full article: Cars.USNews.com

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