By Mark Holan, editorial director, ARTBA
Brisk pre-orders for Tesla’s Model 3, the company’s first all-electric sedan, are jolting the motor vehicle market. The enthusiasm is also sparking questions about whether electric vehicles (EVs) are actually “green” or not, The Hill reported recently.
EV drivers who think they are helping the environment might be shocked to learn they could be doing more harm than good. “In many parts of the U.S., these superficially “clean and green” EVs will be powered by fossil fuels, including coal,” which supplies about two-thirds of the nation’s electricity, the story says.
But there’s an even bigger issue. EV drivers are also short changing federal and state funds that help repair and build transportation infrastructure, and the government is helping them do it. Here’s how:
The number of EVs and alternative-fuel cars and light trucks is expected to grow from 21.5 million vehicles in 2016—accounting for 9 percent of the U.S. vehicle stock—to 29.3 million vehicles in 2021, or about 12 percent of the entire fleet, according to data from the U.S. Energy Information Administration. Alternative-fuel vehicles include vehicles that run on propane, fuel cells and natural gas, and various hybrids.
These vehicles cause wear and tear on roads and bridges similar to traditional gas-powered cars and trucks, but their owners are not paying as much in motor fuel taxes because they buy significantly less gas and diesel fuel. That means they are not contributing a proportional share to the federal Highway Trust Fund (HTF) and similar state accounts that pay for transportation construction and maintenance.
Alternative-fuel cars average anywhere from 50 miles per gallon for an electric-gasoline hybrid to as much as 132 miles per gallon for an electric vehicle. This is compared to an average of 26 miles per gallon for the entire stock of U.S. cars. ARTBA’s Transportation Investment Advocacy Center™ released a report examining how states are beginning to tax alternative-fuel and electric vehicles.
EVs could cut into transportation funding in another way.
Tesla has announced an ambitious timeline to produce 500,000 EVs per year by 2018, or 10 times the number of vehicles it produced in 2015, according to a Bloomberg story. The market for these still-pricy vehicles, which can cost north of $40,000 to drive off the lot, is being goosed by a federal tax break valued at $7,500. The subsidy is scheduled to drop by half as sales increase. Still, each EV that replaces a gas-powered vehicle will eliminate the approximately $100 per year in federal gas taxes that owners of traditional cars and trucks contribute to the HTF.
In other words, the government is undermining its own program to pay for transportation infrastructure improvements. That’s another reason why fixing the fund with a sustainable surface transportation revenue source is more critical than ever.