[RahulNagaraj]

According to media reports, the increasing number of EVs on the roads of California has started causing a dent in the state's budget.

The state charges $300 a year as gasoline tax for its ICE-powered vehicles, while EVs just pay a $100 annual registration fee. This has started to result in a major dent in the funds collected, used for the road's maintenance. Hence, the state has decided to replace the 'gasoline tax' with a new mileage-based tax system to offset the losses. As per officials, the state recorded 1.1 million electric cars and 1.3 million hybrids, back in 2022.



Lauren Prehoda, Spokesperson for Caltrans, mentioned that the annual cost of maintaining California's road networks is around $8.5 billion and that the vast majority of comes via gasoline taxes. Prehoda stated, "On average, Californians pay about $300 a year in state gas taxes. EVs have a $100 [annual] registration fee. That's a $200-million-a-year-loss."

As per the new system, California Road Charge will record the number of miles driven annually by motorists and tax them accordingly. The exact rate for the same though is yet to be fixed. However, a cost simulator lists three options: $0.02, $0.03 and $0.04 per mile.

Ahead of the introduction of the new tax system for motorists, the state has announced the start of a pilot program for the same. The pilot program is scheduled to start in August 2024, with officials selecting an unspecified number of applicants in July. Those who want to be part of the pilot program can sign up for the same on the California Road Charge website. The participants will then be asked to take monthly road charge payments between August 2024 to January 2025, after which they will need to fill out two surveys about their experience.

The state will also refund the participant's gasoline or EV registration fee at the end of the program. In addition, they will also give participants $400 in gift cards.

The data gathered at the end of the pilot program will help lawmakers determine whether or not the state should replace the gasoline tax.

Source: Autoblog

Link to Team-BHP news

[Jeroen]

Well, similar moves are bound to happen in all markets where EVs start to outnumber ICE cars.

As with any new technology, all financial benefits are usually in the early years of introduction. That tends also to be the period where the product, ie an EV is still quite expensive.

As markets mature these sort of benefits and also subsidies disappear. On the upside, that coincides with more affordable EVs being introduced to the market as well.

Jeroen
Jeroen

[Aravind_M92]

Little off topic. I remember reading that tyre wear on EVs is higher due to instant torque availability. Doesn't this reflect on the roads as well? Won't there be more damage to roads by an EV rather than an ICE car?

[Stratos]

Originally Posted by Aravind_M92

Little off topic. I remember reading that tyre wear on EVs is higher due to instant torque availability. Doesn't this reflect on the roads as well? Won't there be more damage to roads by an EV rather than an ICE car?

Most roads are used by LCVs and HGVs too. They are way heavier than an electric car, so that should not be the case.

[neon115]

This is bound to happen.

In my city of Vancouver, every 4th car sold in 2022-2023 was an EV. We have some of the highest taxes on Gas (petrol) in North America yet there was significant deficit in tax revenue. We also have some of the lowest electricity rates in North America.

The government is already experimenting with multi tier electricity pricing to offset this. But in long term I think this is the only option as we move away from ICE based vehicles to alternate fuel.