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$100 Electric Vehicle Tax? State of Washington Should Think Again


The State of Washington is currently considering a new policy that would implement a new annual registration fee of $100 on electric vehicles. This new fee would be in addition to other registration fees currently assessed on all highway vehicles. Is this a fair policy for electric vehicle owners?

Apparently, the Washigton State Senate is concerned about losing revenue from state gas taxes from plug-in vehicles. This preemptive fear could be a result of recent statements from the Federal Highway Trust that allude to losing revenue from plug-in cars.

2011 Nissan LEAF prototype

2011 Nissan LEAF prototype

Enlarge Photo

Interestingly enough, however, the bill (known as SB 6377) takes a rather optimistic perspective towards the role that electric vehicles have as part of the state's transportation system. The authors of the bill state that the new policy is necessary "as the state's fleet changes from motor vehicles powered by traditional sources, such as gasoline and diesel, to those powered by electricity."

In fact, the authors of this bill, who compose the Transportation Committee for the State of Washington, are rather "bullish" on the topic of electric vehicles. In a conversation with Jason Doudt, the Session Intern for State Senator Sheldon, I learned that these policymakers "definitely want state fleets to go electric" and "approve highly of green energy."

So, in an attempt to "create a system where each driver pays for a fair portion of his or her use of the road," legislators have proposed a simple strategy - charge $100 every year. This is a far more simplified approach than a Vehicle Miles Traveled (VMT) tax, as proposed by the U.S. Federal Government or by some European countries. In this way, you avoid complicated GPS tracking systems or other taxes calculated by weight of the vehicle, as has been proposed under a VMT tax.

But is it fair? And, just what kind of electric vehicle is included under this policy? Under this policy, only "vehicles that use propulsion units powered solely by electricity" are charged $100. So, that means that owners of a 2011 Chevy Volt won't have to pay this fee, but owners of the 2011 Nissan Leaf will. This seems rather arbitrary, considering that plug-in hybrid owners can do most of their driving in all-electric mode, but will still be exempt from this fee.

In the near future, it appears that the owners of neighborhood electric vehicles (NEVs) will be the ones mostly affected by this bill. This is unfortunate, considering that most NEVs drive far less and are lighter in weight than conventional petroleum vehicles, meaning that their impact on Washington's roads is rather minimal.

Washington State Senators should realize that such a policy proposal is rather short-sighted and could potentially hinder the sale of plug-in vehicles in the state. This is obviously the "politically weak" choice for generating revenue for the state transportation system. State gas taxes, as well as federal gas taxes, have remained stagnant for over a decade.

If policymakers are really concerned about generating revenue for roads, they should consider imposing higher taxes on the vehicles that are primarily responsible for their degradation.

What policymakers should also realize is that the state stands to benefit more from plug-in vehicles than they currently recognize. For example, the mass penetration of plug-in vehicles into the market could save money spent on state health care costs for treating respiratory illnesses associated with petroleum emissions. With a little more foresight and knowledge, policymakers can craft policies that provide a win-win situation for both the state and EV drivers.

Shannon Arvizu is a clean-tech strategist and educator at Columbia University. You can find at more at www.misselectric.com.

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Comments (25)
  1. Perhaps they will grow smart, remove the gasoline tax, and make it the same for all vehicles in the state.
     
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  2. Also, they are forgetting that the energy to power the cars is coming locally instead of being shipped in. So maybe they should tax the electric companies. Or just realize that the increased business is good for the state.
     
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  3. Well, if they are going to tax the Leaf, but not the Volt, I'm down with that, LOL.
    All over the country, our highways are falling apart. If no one wants to pay for maintenance, let alone new construction, what will become of them? $100 sounds pretty nominal to me. It's a lot less than I'm pauing in gas tax now. And way better thatn the Byzantine methods dreamed up by the Feds, as mentioned in the post.
     
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  4. One problem with this tax is it doesn't include other alternative energy vechicles that also use the road without paying road tax. So why just stick it to EVs? Not exactly fair. ANd the $100 number seems entirely arbitrary, where did they come up with the number? If all I have to do is include a gas genset and call my EV a hybrid, then that's what I'll do to avoid this unfair tax.
     
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  5. While the specific value does seem arbitrary, why are EV enthusiasts automatically bent out of shape? Gas taxes to pay for roads are far in excess of this over the course of a year. While I am a fan of innovative new technology, I am not a fan of the holier than thou attitudes of most posters on sites such as this one.
     
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  6. I see complaints that gas is too cheap, so we should raise taxes. That's fair? Your product can't compete, so you cry to the government to even the playing field? Or how about complaints from Prius drivers in California that they're going to lose their privilege of driving in the HOV lanes this year? Because they drive a hybrid, they should be able to congest lanes meant for expedient travel of large groups?
    The progression of technology is great! I hope to see us wean off petroleum eventually. And I work in the oil and natural gas drilling industry! But I want it to be an orderly change after having properly evaluated the potential technologies involved including how they impact the economy, not just the perception of the environment. Mostly, I want people to lose the attitudes and the insane fanaticism about EV's or hybrids running biofuels vs regular gasoline or diesel driven vehicles. Regardless of people's opinions these days, the world owes a lot of gasoline and diesel transportation. Even if they have visions of some "green" utopia, their world revolves around oil for the time being. Live with that, but work for a brighter future. Don't castigate others whose opinions you don't share.
     
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  7. Tax the fuel... Not the vehicle.
    In this case the fuel is electricity. The tax increase on electricity would be so small no one would even notice.
    As the cars become more ubiquitous, increase the tax only enough to offset the loss of gasoline tax revenue.
     
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  8. It seems a bit immoral to tax EV's before they even get a chance to get some market share while at the same time sacrificing thousands of lives overseas for the sake of cheap gasoline for the SUV economy. Why not internalise some of these external costs of oil addiction and add a substantial tax on gas? Use the money for EV related policies and kick that nasty oil habit!
     
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  9. I don't know what the State & Fed Gas tax is in Washington, but in Wisconsin it totals $0.56/gal. My Honda Fit used about 450 gal last year, so I paid about $253 in gas taxes. Go with the $100 and shut up before someone does the math! In reality, the taxes pay for the roads, so everyone should pay their fair share.
     
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  10. Shannon: good point about the "green premium" early EV adopters will face. In economic terms EV's have positive externalities or social benefits whereas gasoline is the archetypal example of good with negative externalities or social costs -due to the environmental and political costs associated with oil addiction- that are not reflected in the market price. So it makes sense to subsidize EV's to overcome the green premium effect and speed up the process of EV's becoming mainstream and tax fossil fuels to curb demand for a product that all the world is ready to fight kill and die for rather than the other way around. Note that some studies suggest that the social cost of gasoline is way higher than $10/gallon (URL) indicating the massive scale of gasoline (indirect)subsidies.
     
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  11. In order to power these plug-in vehicles, electricity will be taken from the power grid. As demand increases, the cost of electricity will increase unless new sources of electricity are developed. Currently electricity nationwide comes from 44% coal, 20% nuclear, 24% natural gas , 6.8% hydroelectric and 3.6% biomass/geothermal/solar/wind. This comprises the so-called "green solution" people have such a love-affair with and think has no emissions. http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html
    Tacoma energy used to have a site that mentioned this part of Washington has a yearly daily average of 3 1/2 hours of sun. I calculated the cost of a solar set up to supply all my electrical needs of a modest home would be $60,000. The Bob Rivers show would have a guy come on and say he could do it for $30,000 and at some point have to admit that would supply half the home's needs. Like solar, wind is also an off and on thing. It's mostly available outside the hours of higher demand. It does not have electricity storage so must be combined with hydro(already at capacity)/biomass/natural gas/coal for off-times just like solar.
    If people are causing my energy grid rates to go up, a grid that utilizes coal and natural gas(pollutants like gas and diesel), insisting on no new nuclear power plants, contributing to congestion, causing wear and tear on the roads, then they should help pay for the roads like the rest of us.
     
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  12. This asks electric vehicle owners to subsidize freeze thaw cycles, which they do not cause, and heavy trucks, which cause exponentially more damage than electric cars and motorcycles. Where's the rationale for that?
    This is a slap in the face to electric vehicles.
     
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  13. I'm sorry, but this article comes across as even less informed than the last one on this topic.
    Show me how the Volt's electric motor, it's only source of direct propulsion, can run without electricity and I'll start taking you more seriously.
     
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  14. Bottom line is that road tax should go by (weight x miles driven) for electrics. Which is essentially the way the system works now when you buy gas or diesel. Heavier vehicles get less gas milage, so they buy more gas and pay more tax. Drive more miles, buy more gas = pay more tax.
    What I find humurous is all of these people that think there are no emissions from electrics. Coal & Natural Gas are emissions and anyone who has had high school physics knows that you transfer engergy from point to point you lose efficiency. Significant amount of electricity produced (emissions) is lost just going from power plant to your home. Battery loses energy just sitting in garage. Unless your personal source is straight solar, wind or Nuclear, you are contributing an equal amount of emissions as a typical gas engine.
     
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  15. Again, thank you for your comments. In regards to the environmental impact of plug-in vehicles, I direct our readers to the landmark EPRI/NRDC study that evaluates the impact of plug-in hybrids given our current grid mix of energy (http://my.epri.com/portal/server.pt?open=514&objID=223132&mode=2).
    Also, in regards to the all-electric mode of the Chevy Volt, correct me if I'm wrong, "Truth," but the Chevy Volt is a series hybrid that is intended to run based on electricity alone for the first 40 miles. 70% of Americans commute less than 40 miles/day. For that reason, most Americans can do most of their driving in all-electric mode, if they choose.
    Finally, policies send signals to the public. In Denmark and Israel, countries that are taking petroleum independence seriously, state taxes for petroleum vehicles are much higher than electric vehicles for a reason - to send a signal that electric vehicles benefit the public more than internal combustion engine vehicles.
     
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  16. Nope, you are coming across as less and less trustworthy. Are you a GM lobbyist, rather than a competent journalist or researcher?
    Your comment about the Volt does not address the point in question, that you claimed that Volt owners would not have to pay the fee, refuted by the fact that the Volt uses only an electric motor, which is its only propulsion unit, powered solely by electricity. I'm still waiting for you to show us how an electric motor provides propulsion without electricity. You seem to be confusing enery sources, energy carriers and propulsion units, the last of which which in the case of a Volt is only an electric motor. It is the last in that list that matters for the Washington law, as you cited it.
     
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  17. Truth & Shannon -- Let me see if I can get you to on the same page.
    Shannon is right in that the bill up for debate, will tax straight BEV's like the LEAF. The Volt is not subject, because it is "assumed" the Volt owner will buy enough gasoline over the year to cover. Shannon believes that most Volt users will not ever hit the $100 limit.
    Now Shannon -- Truth is correct, but went kinda of Democarat Elitest on you instead of educating you. The gas engine in the Volt does not propel the car. It runs a generator which charges the battery. So the Volt is propeled strictly with electricity.
    Shannon, my whole arguement and what I am trying to educate people on is the fact that BEV, EREV, Hybrid, and ICE all tear up the roads the same way and while I am a no tax guy, I am a fair pay for use guy. So I am all for eliminating the current system of taxes and fee structures and replace it with the weight and miles driven approach. Your article leaves us to believe that "Green" cars do not damage the road, when in reality they are no different than a simular size gas burner.
    And Finally, When charging the battery, even in off peak hours, a coal burning plant is dumping a lot of bad chemicals in the air. If the purpose of the change is to get off foreign oil, then Volt & Leaf are perfect solution although very high cost. If the Volts & Leaf are for Environmental reasons, then under the current grid system, they are not optimum.
     
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  18. "BEV, EREV, Hybrid, and ICE all tear up the roads the same way."
    No, they don't. Above around 10,000 pounds, additional vehice weight creates exponentially more road damage.
    Almost all BEVs, EREVs and Hybrid are under 10,000 pounds, while almost all vehicle over 10,000, which cause much more damage to roads, use full ICEs for propulsion.

    http://www.oregon.gov/ODOT/TD/TP_RES/docs/Reports/EffectWeightMileTax.pdf
    (see page 1)
     
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  19. Facts Professor, put down the pipe, "Take a hit,of fresh air". Rread my entire paragraph, & I will explain for you. "I am a fair pay for use guy. So I am all for eliminating the current system of taxes & fee structures & replace it with the weight and miles driven approach." This means is that a heavy vehicle will pay more. If you have a Hummer at 6000 lbs., you will pay more than a Honda Fit which is about 2400 lbs. Big SUVs, Family Vans,etc. fall well under the 10,000 lb. limit. You are correct that over 10K lbs. tears up the roads more, which is why most local roads prohibit trucks and semis. These big trucks typically pay a road tax in addition to fuel taxes.
    Next line -- "Your article leaves us to believe that "Green" cars do not damage the road, when in reality they are no different than a simular size gas burner." Note the pharse "Simular size". This means that a vehicle about the same size (weight) should pay about the same tax. For example, my Honda Fit (ICE) weighs about 2,400 lbs while a Toyota Prius (Hybrid) weights about 3000 lbs. The Chevy Volt (EREV)is specified at 3,500 lbs. While the Nissan Leaf (BEV) is slated to come in at 3,500. Honda Fit (ICE) should pay less taxes as it does less damage to the road versus any of the Hybrid, EREV and BEV listed and commercially available.
    So Professor Fact, you need to reduce the amount of Hippy Lettuce and start eating ICEberg Lettuce, and read a complete paragraph before posting.
     
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  20. @ Jimza,
    We actually agree.
    A $100 tax on electric vehicles, the topic of this article, is not a weight tax. Of course any rational person would support extending an exponential weight tax all the way down to bicycles so that road users pay for what they are using. Sure, too bad Washington State didn't propose an annual exponential vehicle weight tax, such as (more than a dime for every 100 pounds) exponent applied to base e (less than a buck a year for bicycles, less than a few bucks a year for motorcycles, $20 a year or more for a 3,000 pound vehicle and about ten times that for a 6,000 pound vehicle), a fall off a log no brainer as that would link the tax to actual road damage (and absolute vehicle efficiency, of which liquid fuel use is a now broken metric).
     
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  21. Remember larger vehicle pay tonnage fees already on their tab renewals, so there already is a 2nd system where vehicles pay more taxes for greater weight, in addition to fuel. Also, in addition to wear on tear on roads all vehicles contribute to congestion which gives rise to need for road improvements to accomodate the increased congestion. Overpass work, new lanes, new concrete barriers, these are put in for all types of vehicles, not just non-plug-ins.
     
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  22. Remember larger vehicle pay tonnage fees already on their tab renewals, so there already is a 2nd system where vehicles pay more taxes for greater weight, in addition to fuel. Also, in addition to wear on tear on roads all vehicles contribute to congestion which gives rise to need for road improvements to accomodate the increased congestion. Overpass work, new lanes, new concrete barriers, these are put in for all types of vehicles, not just non-plug-ins.
     
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  23. @ troublemaker.
    You're no trouble at all.
    Right, then, we agree. We are talking about extending that 2nd weight system down to bicycles. That fully satisfies your points, as every vehicle that uses roads would pay, including electrics, on a basis that directly links user fees to road costs for all vehicles, not some whimsy that singles out electric vehicles.
    It's not electrics fault that they tend to weigh less and are smaller than monster SUVs and so thus cause less road wear and tear and congestion for lower infrastructure costs.
    Your grid rates and grid energy source mixes have absolutely nothing to do with road use costs or fees and electric vehicles make them grid rates and overall energy use go down, not up, for several reasons. But that should be a different article.
     
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  24. Sounds like we all agree everyone should pay their fair share for roads! Now Shannon needs to post an article on her position of true cost of ownership for BEV, EREV & Hybrid versus ICE. Then another article on her position on the effects on the environment, then we can have more spirited debate.
    Regarding Environment: Unless country is willing to go Nuclear, non-ICE vehicles will be contributing more CO2 than ICE based on Coal/Natural gas plants and the true efficiency of the grid. Remember France & Germany are about 90% Nuclear. Regarding cost: Right now ICE is much lower cost, The only way to make cost effective would be to tax gas like Europe, with gas at about $8/per gallon. My guess is that only 1 or 2 in congress would ever vote for that one!
     
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  25. I will do a TV show on this tax and fight it - ch 77 Seattle - if I find ONE, just one person who will appear with me as an "Expert" on solar stuff.
    Just one.
    So far - no responses from the solar groups in either Seattle or Tacoma.
    So - bend over solar folks and suck it up.
    Honorable Grace
    Dr William B. Mount
    Knight of Malta
     
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