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Tolling Points

Study Recommends Road Usage Charging to Electric Vehicles

Bill Cramer

A new study is pointing to road usage charging as the preferred method to ensure that electric vehicle owners pay their share of the cost for the roads they use.

“As we think about this longer-term transition toward a much higher volume of electric vehicles, the sustainability of the revenue for infrastructure funding is going to decrease," report author Alan Jenn, research scientist at the UC Davis Institute of Transportation Studies, told Greentech Media last month. "From the goal of road infrastructure funding, it doesn’t do a good job.”

After a review of various funding options during a rapid transition in vehicle technologies, “the one we land on in the report as the most sustainable, and provides some interesting potential options in the future, is the use of a road us[age] charge for electric vehicles that is a per-mile fee.”

Electric Vehicles Rising

The UC Davis study comes at a time when the shift to electric vehicles is accelerating—and not just in California, where state policy appears to have been one of the drivers behind Jenn’s study.

With lithium ion batteries becoming more efficient and far less expensive, multiple studies and projections over the last two or three years have pointed to the inevitable reality that the total cost of ownership for EVs will fall below the equivalent cost for gasoline-powered vehicles—the only question is whether it’ll happen as soon as 2022, or later in the decade. EVs are cheaper to “fuel” than internal combustion. With fewer moving parts, they’re less expensive to maintain. They promise carbon-free operation to whatever extent a jurisdiction has phased out coal-fired generation and natural gas “peaker” plants.

And much of the word-of-mouth buzz around EVs reflects the reality that they’re fun to drive—even if they lack the vaunted Tesla logo and the company’s legendary “Ludicrous Mode”.

All of which underscores Jenn’s basic point—that highway operators will need some way to sustain revenues, in the face of what might be the most profound roadway transformation since the introduction of the Model T.

Getting a Plan in Place

Greentech Media casts the UC Davis study as a follow-up to pricing measures that are already on the books. In 2017, then-California governor Jerry Brown’s road funding bill, SB 1, included a $100 annual registration fee for zero-emission vehicles (ZEVs). Greentech says 21 states have since adopted similar measures, aiming to recover the gas tax revenue they’re losing as the vehicle mix changes.

The California registration fee falls significantly short of what internal combustion drivers pay, and “was always viewed as an interim measure,” the cleantech news outlet reports. “Prior to the passage of SB 1, California had already launched pilots to test the viability of mileage-based alternatives to pump-based fuel taxes for the millions of gasoline cars already operating in the Golden State. It was assumed that if such a per-mile system were implemented statewide, EVs would be included as well.”

For now, Jenn is recommending a two-track system—fuel taxes for gasoline and diesel users, RUCs for EVs—as an alternative to what he sees as a more complex OReGO road usage charging pilot in neighboring Oregon. “From a practical standpoint,” he said, “it might be a lot easier to implement a RUC for a smaller subset of vehicles, such as electric vehicles.”

But if automakers can “figure out how to standardize all of the requirements through the telematic system of the vehicle for EVs first, then that could conceivably be extended to internal combustion engines in the future."

Too Soon to Pay?

Greentech does point to some bigger-picture questions about whether it’s premature to ask EV owners to pay their fair share of highway costs. While EV sales in the United States grew 81% last year, to 361,307 units, they’re still a nascent market, especially outside California.

“If we really want to see EVs replace the ICE [internal combustion engine], then not making them pay road use fees is one kind of fairly painless incentive that can be offered,” wrote Chris Nelder of the Rocky Mountain Institute’s mobility practice.

“Making them pay the same as ICE essentially says both are equally valid from the perspective of social priorities, ignoring the externalities,” including the climate and health impacts of fossil fuel consumption.

There’s just one place to crunch the numbers on Road Usage Charging and other highway finance options. Registration is now open for IBTTA’s Summit on Finance & Policy, May 19-21, 2019 in Philadelphia.