Powering Infrastructure: How EV charging could fund local roadways
Tech vs taxes: One moves a lot faster than the other
Vehicles have been getting faster, safer, and smarter for decades. Unfortunately, the same cannot be said for our tax system. At its inception, the federal fuel excise tax was a brilliantly crafted piece of legislation, eloquent in that frequent drivers purchased more gas while the same was true for heavier, less efficient vehicles that cause greater road damage than compact cars. By purchasing more fuel, these frequent consumers effectively put more into maintaining roads. However, this simple principle has faltered in recent years as cars have gotten heavier with new safety features while simultaneously improving their fuel economy. Compounding this issue is the fact that the fixed per gallon tax has failed to account for increases in inflation and is now facing a staggering deficit. Yet rather than fight a nearly impossible political battle to up the fuel excise tax, legislators should instead look to the future of the industry to proactively implement a fair and efficient tax system around EV charging.
Recharging revenue streams: Investing in a solution for tomorrow
Unlike gasoline, a commodity often imported and overwhelmingly used for a single purpose, electricity is utilized by countless consumers for a vast range of purposes. Thus, taxing electricity generally and directing funds towards infrastructure would be far less fair than the original fuel excise tax design. The challenge becomes how do legislators know when electricity is being used by EVs as opposed to powering appliances or turning on the lights. Looking to our current system once again for inspiration, the solution may lie in taxing at the point of sale; this time though, at the plug rather than the pump.
In this way, municipalities should look to install extensive EV charging stations throughout their jurisdiction in what would mark a significant addition to the realm of publicly owned infrastructure. This would be a rewarding, multifaceted investment, helping to meet state environmental standards, improve local air quality, and of course, generate a new funding source for roadway infrastructure maintenance.
Yet why should government own the stations? Well, without this component, the government loses the opportunity to accelerate the expansion of EVs. In this way, rather than seeking immediate returns on investment, the key would be to delay the tax. This ensures that the adoption of EVs is not deterred and EVs retain refueling cost as an advantage over internal combustion engine vehicles. Furthermore, it will accelerate the electrification of automobiles as a convenient and ubiquitous infrastructure remains a hindrance to EV adoption. Eventually, as the masses transition, the government may raise the price of charging, directing the funds to local infrastructure. Furthermore, it could even help to improve the feasibility of increasing the fuel excise tax as EVs will drive down gas prices through competition.
Smarter cars, smarter taxation
Electric vehicles are not the only advancement coming to the auto industry as autonomous vehicles promise to categorically improve the commuting experience. Yet while these smart cars promise to improve traffic flow, it is unclear what their effect will be upon vehicle miles traveled as (former) drivers may find the new opportunities for in-vehicle productivity as an incentive to commute farther and drive more.
Networked charging systems, already seen today, may provide a technological solution. By providing, or mandating, data sharing between the charging system and vehicle, refueling price rates could be increased by detecting longer commute distances. Acknowledging both carrots and sticks, the same data sharing platform may be used to identify cars that are a part of the shared economy or that frequently take carpool loads and be provided with a charging discount. In this way, planners and legislators may find a new tool to encourage smart growth and incentivize more efficient commuter behaviors.
Ultimately, such a proposal looks to utilize the best practices of efficient taxation and funding and merge it with developing technologies to promote the desired adoption of EVs for environmental benefits while simultaneously creating revenue for the local infrastructure systems of the future.
