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The NC Electric Vehicle Tax Debate

Just as electric vehicle registrations have grown across the U.S., so has a new tax aimed at the owners of electric vehicles. Eleven states now charge owners of EVs, including plug-in hybrids and in some cases, hybrid electric vehicles, some form of an annual tax or fee at registration.

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These states include North Carolina, Idaho, Washington, Virginia, Colorado, Michigan, Wyoming, Georgia, Missouri and Nebraska. According to the Sierra Club, just since the start of 2017, six states (Indiana, South Carolina, Kansas, Tennessee, New Hampshire and Montana) have introduced legislation that will require plug-in electric vehicle owners to pay annual fees up to $180.

Currently, the national fees for electric vehicles range from $50 in states such as Wyoming and Colorado to a whopping $300 in Georgia for commercial use vehicles. An increasing number of states are becoming more successful in implementing these fees, rankling environmentalists and the EV community.

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State governments have justified the fees as a way to help make up for lost gasoline-tax revenue. The Department of Energy (DOE) outlines the purpose of these added fees by stating, “The maintenance of our highways has traditionally been funded from a combination of federal and state taxes collected at the pump from the sale of motor fuels. Because EVs do not refuel at pumps that collect state and federal fuel taxes they do not contribute to the upkeep of the highways. This has caused many states to rethink how funds are collected to support the highway infrastructure.”

In January of 2014, North Carolina EV owners began paying an added annual fee of $100, which has since increased to $130 within the past three years. The fee’s presence in North Carolina has created a highly controversial debate, leaving the public divided in their opinions. To get a better grasp on how the fee is directly affecting the North Carolina EV community, we reached out to several Plug-in NC ambassadors to hear their positions on the tax.

To begin with, some feel it sends the wrong message, discouraging people from driving electric vehicles and hindering the growth of EVs altogether. “I feel it is unfair to those people who are trying to make environmentally conscious decisions. They are getting penalized for it because they aren’t buying gas anymore,” says Matthew Ouellette. Of those who disagree with the tax, most of them share a similar view to Ouellette’s, feeling EV owners are being punished for making an effort to lower their environmental footprint and further reduce the United States’ dependence on oil. With the public constantly being informed about the importance of reducing human-caused environmental impacts, many EV owners feel it seems counterintuitive for state governments to charge them an extra fee for doing so.

Furthermore, while EVs are far from being a new concept, they are still evolving and need continuous support to reach their next stage of development, specifically, becoming more affordable, spacious and having longer electric driving ranges. In order to reach these advancements, many believe that EVs need even more incentives to develop their advanced technology and intensify their mainstream attraction. Even though electric vehicle owners benefit from not having to buy gasoline every week, the potential for the EV taxes to rise to daunting amounts may discourage the public from going electric in the first place. Additionally, many are fearful that these added annual fees foreshadow future legislation that will deter the progress of EVs and favor the gasoline industry.

“As an automotive engineer, whose career is focused on electric and hybrid electric vehicles, I’ve witnessed the tactics employed against EVs from a front row seat since 1986,” reveals Dave Erb. He says further, “The $130 fee doesn’t strike me as anything unusual… Frankly, watching the benighted resistance shrivel to this level of impotence gives me incredible hope.”

Even with an abundance of opposition, many, including several of our ambassadors, have a different outlook on the legislation. “The annual $130 tax, in my opinion, is small potatoes… We cannot expect to use the roads for free,” Bryan Ayers says simply. A good portion of the EV community in North Carolina agrees with this perspective and are indifferent to the fee as long as it stays relatively low, looking at it as a way to help pay back the state for road use. “The fee is slightly higher than what I end up paying in North Carolina gasoline taxes for my gasoline car per year, but not enough higher to bother me,” says Gary Pellett. Many EV owners have acknowledged that paying taxes is just part of the package when owning a vehicle, even one with zero direct emissions. Robbi Walls shares a similar view, “I don’t mind the tax. EVs are heavy and we do use the roads so we should help to maintain them.”

Moreover, a key argument in support of the fee is the weight component of electric vehicles and their impacts on road maintenance. “Most EVs outweigh their gasoline counterparts because of battery weight,” states Chris Browder. He adds that EV owners save a large sum of money from opting out of gasoline purchases so it’s only fair to compromise with a $130 annual tax. “Not a bad price to pay for not having to buy gasoline, “exclaims Walls. The significant savings electric vehicle owners receive from not having to purchase gasoline seems to be the dominant reason many are unopposed to the tax.

Although the public is divided on the effectiveness of the EV tax, there’s one thing everyone can agree on—the future of electric vehicles is bright! Plug-in electric vehicles are growing exponentially each year with countless new models expected to hit the markets by 2020. Furthermore, research is predicting that by 2040, electric vehicles will account for about 35 percent of new car sales globally. Additionally, with the decreasing costs of batteries, EVs may be priced the same as their internal-combustion counterparts by as early as 2022.

EVTax3Despite the bumps along the way, like taxes and naysayers, electric vehicles have an exciting road ahead of them. To sum it up, an optimist Dave Erb adds, “There’s an old saying, usually attributed to Gandhi: “First they ignore you. Then they laugh at you. Then they fight you. Then you win.’”