For Faculty
How Much Should Hybrids and Electric Vehicles Contribute to Roadway Funding?
Rebecca J. Davis, Matthew N. Murray, Jilleah G. Welch, January 3, 2017
Energy security and environmental concerns have led to a growing emphasis on alternative fuel vehicles. Particularly within the transportation sector, where gasoline consumption accounts for 47% of total U.S. petroleum consumption, there has been a shift to develop, incentivize, and assist in the adoption of vehicles that are not solely fueled by gasoline. However, the decreases in fuel consumption associated with hybrid and electric vehicles result in gas tax revenue losses for states. While hybrid and electric vehicles represent a small percentage of vehicles on the road, several states have opted to impose additional fees on these vehicles in addition to regular registration fees. The additional fees for hybrid or electric vehicles are largely in the spirit of fairness and an attempt to recoup lost gas tax revenues specifically for transportation funding. In this report, we provide a brief overview of how states incorporate hybrid and electric vehicles into their transportation funding structure. Equity impacts, incentive programs, and how the fees compare to estimates of lost revenue are also discussed.
