Green Car

Could an “electric fuel” tax for EV use help states solve the gas-tax dilemma?

The gas tax remains one of the main funding sources for road infrastructure, which has led to cries that electric-car drivers aren’t paying their fare share of road maintenance costs. Minnesota’s solution? Consider electricity a fuel.

A new bill circulating through the Minnesota legislature calls for an “electric fuel” tax for EVs. It even calls utilities and charging networks “electric fuel dealers,” and lays out an amount of 5.1 cents per kwh—several dollars per each charge of longer-range EVs. If adopted, Minnesota would tax electricity used to charge electric cars as fuel, reports the St. Cloud Times.

Although no state currently taxes EV energy use by the kilowatt-hour, the idea of added fees for electric cars isn’t new. States have been losing gas-tax revenue, and several have proposed different fees or taxes on EVs to make up for it. Federally, the momentum is favoring a completely rethought vehicle mile tax, which critics say it could take years to develop, so this might serve as a patch.

The terminology echoes what some of the EV charging sector has started to embrace. Chargeway has tried to get consumers to think about electricity as fuel in an effort to make EVs and charging seem more normal. An EV equivalent of a gas tax probably isn’t what the platform had in mind, but it’s the logical next step.

Chargeway electric-car charging symbol inside charge-port door

As more electric cars are sold, it’s not surprising that the fact that drivers don’t pay gas taxes is proving controversial. But framing the conversation around whether EV drivers are paying their fair share sidesteps issues with the gas tax itself.

The gas tax has been an overlooked way of reducing driving and helping pay for highways, some might argue. Although it also amounts to a regressive tax, and has largely failed to raise enough money to fund infrastructure on its own.

That’s why many agencies have recommended raising the gas tax, but such a move would be politically difficult.

When we asked readers how EV drivers should pay for road use in 2019, and the winner was “per-mile fees“—essentially echoing what the federal government is headed to. Do you think that’s a good solution for funding highway infrastructure?

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