UC Study Recommends Charging EVs for Miles Driven

Stephen Lawson

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17th January 2019

An inconvenient truth about electric vehicles is that drivers can charge them as much as they want and never pay a cent in gas taxes, which most governments rely on to build and maintain roads.

Now, researchers at the University of California say the best way to get around this is to charge for miles driven — but only by zero-emission vehicles (ZEVs).

It was the state of California that asked the team for advice, a fact that’s not surprising given how strongly the state’s leaders have promoted alternative fuels. Last year the state set a goal of getting 5 million EVs on the road by 2030. In the first eight months of 2018, Californians bought almost 90,000 ZEVs, including battery-electric, plug-in hybrid and a small number of fuel-cell vehicles, according to the Auto Alliance.

But while California leads the nation in EV sales, it spent nearly $1.5 billion on roads in 2017, largely from gas taxes.

A gas-tax law passed in 2017 included a way to make this growing fleet of electric cars help support the infrastructure they would use. The Road Repair and Accountability Act increased gas taxes while also imposing an additional $100 annual fee to register a battery-electric, plug-in hybrid or fuel-cell vehicle. The fee is scheduled to come into effect in 2020.

That may not be the best idea, the UC Davis Institute of Transportation Studies (ITS) concluded in its report, released earlier this month. The authors found several problems with the annual fee as a tool to keep road revenue coming in as drivers switch to electric. Then they considered two alternatives and picked a hybrid approach: charging EV drivers per mile while making keeping gas taxes for traditional cars.

The annual fee wouldn’t be fair, ITS finds, because EV owners who racked up miles every day would pay the same amount for roads as those who rarely drove. Also, owners of plug-in hybrids (PHEVs) would pay gas taxes, as well as the fee. The $100 is also the wrong amount, they write: EV owners would pay more than their fair share in terms of the amount of energy they consumed, while spending far less in actual dollars than average drivers of conventional cars.

The Davis team also noted an annual fee would discourage consumers from buying ZEVs, cutting sales by 10% to 20% in the short run.

One alternative to an annual fee would be to tax ZEVs for the energy they use, the researchers note. Instead of being taxed per gallon at the pump, EV drivers would pay a levy when they plugged in and fuel-cell users would pay every time they filled up on hydrogen. But separately metering electricity used for vehicle charging would probably be prohibitively expensive, the report said.

The other proposed alternative was a per-mile road user charge (RUC). Telematics systems built into or added to vehicles can record the number of miles traveled, even without location tracking or GPS.

The UC Davis team concluded that rolling out road-user charges to all vehicles would be unnecessarily complex and expensive. While a growing number of conventional cars now ship with built-in telematics, the state would have to use other methods to collect data on older models.

Instead, the report recommended leaving gas taxes in place and starting an RUC program with ZEVs, which are typically new enough to have telematics built in. As these vehicles grew to a bigger share of the market, the gas tax would eventually fade away, they wrote.

Neighboring Oregon launched a per-mile RUC program in 2015, recruiting 5,000 volunteers to install telematics equipment in their cars. The devices plug into the onboard diagnostics (OBD-II) port and transmit mileage data wirelessly. Volunteers pay 1.5 cents per mile, and any gas taxes they pay at the pump are credited against what they owe. Washington State is also studying an RUC system.

California’s own pilot program, completed in 2017, tested in-car telematics, add-on devices, smartphone apps and manual odometer reporting to log miles traveled.

Stephen Lawson is a freelance writer based in San Francisco. Follow him on Twitter @sdlawsonmedia.