How do we fund our roads? A case of
decreasing revenue from electric
vehicles
Alan Jenn
PhD Candidate
Carnegie Mellon University
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Running out of money for our
transportation infrastructure
Source: Bradley, Bill, Tom Ridge, David Walker. “Road to Recovery: Transforming America’s Transportation”. Leadership
Initiative on Transportation Solvency. Carnegie Endowment for International Peace. 2011. p.17
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Where do transportation
funds come from?
Sales Tax
Titling Fees
One time payments
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Federal Fuel Tax
State Fuel Tax
Registration Fees
Inspection Fees
Use Fees
Annual Fees
Image Sources:
http://cimg.internetbrands.com/www.carsdirect.com/330x185/564/used-car-dealer-prices-1564.jpg
http://newsbusters.org/sites/default/files/main_photos/2012/February/Gas%20223.jpg
http://www.plateshack.com/y2k/Pennsylvania5/pa2013sticker.jpg
Variance of annual fees by state
% of vehicle
MSRP
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Alabama
Alaska
Connecticut
Delaware
Georgia
Illinois
Indiana
Kentucky
Maine
Massachusetts
Mississippi
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Nebraska
Nevada
North Carolina
Oregon
Pennsylvania
South Carolina
Tennessee
Utah
Vermont
West Virginia
Wisconsin
Arizona
Colorado
Louisiana
Michigan
Minnesota
Wyoming
Categorical
by weight,
age, or other
characteristic
Flat fees,
annually or
biannually
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Registration
Fees
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Arkansas
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California
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Florida
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Hawaii
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Idaho
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Iowa
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Kansas
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Maryland
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Missouri
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Montana
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New Hampshire
New Jersey
New Mexico
New York
North Dakota
Oklahoma
Rhode Island
South Dakota
Texas
Virginia
Washington
No use fees for electric vehicles (EVs)
• When EVs operate on
battery power, traditional
forms of revenue flow is
bypassed
• Is this a problem for
transportation revenues?
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Image Sources:
http://www.extremetech.com/wp-content/uploads/2012/01/Nissan_Leaf.jpg
http://www.blogcdn.com/www.autoblog.com/media/2011/01/volt-charging-port.jpg
Sales of EVs are small, for now…
Figure 1: Historical Sales of Electric Vehicles
by Model
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Figure 2: EIA Forecasts of Electric Vehicle
Sales by category
Lifetime fees from a Toyota Camry
Figure 3: Spatial breakdown of lifetime fees for Toyota Camry
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Lifetime fees from a Chevrolet Volt
Figure 4: Spatial breakdown of lifetime fees for Chevrolet Volt
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Lifetime fees from a Nissan Leaf
Figure 5: Spatial breakdown of lifetime fees for Nissan Leaf
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Predicting losses in future revenue
Large sources of uncertainty
EIA
Projections
(use 2013
AEO)
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Vehicle travel
Baseline of
State sales
behavior and
comparison
distribution
lifetime
(against
(proxy against
(assume
growth of
distribution of
average of
average
Toyota
12,000 mi, 12 midsize Toyota
Priuses)
years)
Camry)
Average distribution of Prius sales over
the last decade
Figure 6: Percentage of Prius sales versus total sales by state
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Difference in distribution of Prius sales
versus total sales over the last decade
Figure 7: Difference in percentage of Prius sales
versus total sales and average percent sales by model, by state
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Decrease in funding likely to be several
hundred million dollars by 2025
• On a national scale, impact
is relatively small but
growing
• Higher rates of EV
adoption will compound
existing issues with
transportation
infrastructure funding
deficits
• Future planning to address
issue is necessary
Figure 8: Annual revenue decreases from EVs
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Other funding schemes
• Annualized fees (likely coupled through
registration fees)
– Link to initial price of the vehicle
– Use fee based on mileage of vehicle
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Sensitivity analysis on
possible revenue generation plans
Figure 9: Cumulative revenue sensitivity to a percent
MSRP based registration fee
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Figure 10: Cumulative revenue sensitivity to a per mile
based use fee
Conflicting policies
Incentivize EVs
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Monetary tax credits
Carpool lane access
Emissions inspections exemptions
CAFE/ZEV credits
Cheaper to drive
Disincentivize EVs
• Increased registration fees
• Increased use fees
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Conclusions, Future Work
• Small (~1% by 2025) but growing problem
needs to be addressed
• Finding the right solution is tricky and politically
difficult
• Examine effects of alternative revenue
generation policies on total fleet funds
• Equity issues?
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Acknowledgments
Thanks to the Center for Climate and Energy
Decision Making for funding and to my advisor
Inês Azevedo
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