Skip to Content
Streetsblog California home
Streetsblog California home
Log In
Report

The Effect of Electric Vehicles on California Transportation Funding

Researchers projected future transportation revenue in California to explore what effect zero emission vehicles will have on it. Image: Mineta Institute

Note: GJEL Accident Attorneys regularly sponsors coverage on Streetsblog San Francisco and Streetsblog California. Unless noted in the story, GJEL Accident Attorneys is not consulted for the content or editorial direction of the sponsored content.

One of the arguments against raising the gas tax a few years ago was that, if California were to meet its goal of increasing the portion of electric vehicles on the road, the tax would bring in less money over time. If electric vehicles don't pay for gas, they don't pay taxes on it either. That's why S.B. 1, which raised gas and diesel taxes, included a registration fee adjustment.

Every vehicle owner pays a Transportation Improvement Fee (TIF), which ranges from $25 to $175, depending on the value of the vehicle. And starting in 2020, owners of electric vehicles will begin paying a Road Improvement Fee (RIF) of $100, an amount that was supposed to approach what the average gas car driver pays in gas taxes annually.

Three researchers who have studied the ins and outs of gas taxes for years--Martin Wachs, professor emeritus at the UCLA Luskin Center, Hannah King of UCLA, and Asha Weinstein of the Mineta Institute--have just published a report estimating how much revenue that is likely to be.

Gas and diesel taxes, even at the new higher rates, will bring in less money over time. But even if electric vehicles are adopted at the current lackadaisical rate, the registration fees will largely make up for that loss in revenue.

And if California does reach its goal of five million zero-emission vehicles by 2030, the researchers estimate that revenues will be even higher.

That may seem surprising, since the assumption has been that increased adoption of electric vehicles is a threat to transportation revenue since drivers of those vehicles don't pay gas taxes. But because the TIF is based in part on vehicle value, and new electric vehicles tend to have higher value than gas burners, as more zero-emission vehicles are adopted, TIF revenue will go up.

Of course there are a lot of assumptions behind these estimates, from how quickly zero-emission vehicles are adopted to population size and the overall number of vehicles being driven. Other hard-to-guess factors include the fuel efficiency of the overall fleet--especially given current federal resistance to increasing it--the price of gasoline, and how much people will drive.

The researchers used sources such as a national projections from the US Energy Information Administration where they could. Details on their sources and methodology can be found in the report.

They estimate that the $8 billion in revenue collected in 2018, the first year of S.B. 1, will increase to $11 billion by 2020. After that, revenues fall, but they go back up. By 2040, they project $9 billion in revenues in their "low-adoption" scenario and $11 billion under a scenario where California aggressively adopts zero emission vehicles.

The California Transportation Commission continues to explore other ways to raise transportation revenue, such through road-user charges that drivers would pay per mile driven. But this study shows that even without such a system, there will be a continuous source of money to maintain and improve California's highways, streets, and roads--and that it was a very good idea for the legislature to make sure S.B. 1 included a way for electric vehicles to contribute.

Stay in touch

Sign up for our free newsletter

More from Streetsblog California

Metro and Caltrans Expect to Complete Torrance 405 Freeway Widening Project Next Month

Metro and Caltrans are adding nearly two miles of new auxiliary freeway lanes, a new on-ramp, and widening adjacent streets including Crenshaw Boulevard and 182nd Street

July 22, 2024

Philadelphia Demands More Than ‘Flex-Post’ Protected Bike Lanes After Motorist Kills Cyclist

Pediatric oncologist Barbara Friedes was struck while biking on a "protected" path. Advocates argue that flex posts should be replaced with something far better.

July 22, 2024

Monday’s Headlines

Caltrain's electric trains to start limited weekend service soon; San Diego gets "tap-to-pay"; SF drivers demand "respect"; More

July 22, 2024

Advocates Share What It Takes to Fight Highway Expansions in Court 

What does it take to sue your state DOT? Time, money, the right partners, and a little creativity, a recent survey of activists found.

July 19, 2024

Friday Video: Paris Does it Again

Come for the bike-friendly streets, but stay for adopt-a-tree program and all the car-free school roadways.

July 19, 2024
See all posts