Opposing the new EV fee

This weekend, the Illinois General Assembly passed a budget bill that includes an unfortunate increase on the EV registration fee. As of January 1, 2020, the fee will be $248/year — the same registration as internal combustion (ICE) vehicles (also now increased to $148) plus “an additional $100 per year in lieu of the payment of motor fuel taxes.”

The legislators added this fee because they wanted to have a balanced budget for infrastructure, funded, in the words of State Senator Martin Sandoval, “with sustainable sources.”

While this fee is thankfully a fraction of the $1000 Sandoval had proposed originally, it is still regressive and ultimately detrimental to our state’s environmental goals, and therefore not “sustainable.”

We oppose this fee, and any EV-specific fees in Illinois at this stage, for several reasons:

  1. Electrifying transportation is key to fighting climate change. Transportation is the number one source of greenhouse gas emissions in the US, and continues to rise. The vast majority of those emissions come from light duty personal vehicles. EVs are highly efficient and cleaner than most gas vehicles, regardless of the power source. We need to do more to incentivize EVs, not add premature fees that will deter people from switching to them.
  2. EVs benefit all Illinoisans. Because they produce no tailpipe emissions, EVs help make our air cleaner. Because they can balance the demand on the electrical grid, they can lower electricity costs for everyone.
  3. EVs can be a critical tool in fighting environmental injustice. While some members of the public associate EVs with premium or luxury cars, in reality many people buy their EVs used, often for $10,000 or less. EVs are much cheaper to operate and require significantly less maintenance than combustion engine cars. Because of these advantages, EVs can be a more sustainable and affordable personal transportation option, particularly in communities deprived of adequate access to mass transit. Many of these communities are lower-income and nonwhite, and are already burdened by excessive air pollution. A flat fee on all EVs that does not vary with the car’s value or the owner’s income, will make it less affordable for members of these communities to choose electric for their next car, and will therefore continue the cycle of environmental inequity.
  4. Finally, EVs make up less than 1% of all cars in Illinois. The amount of revenue generated by this fee does not justify the adverse effect it will have on EV adoption at a time when we urgently need to speed it up.

Some, including a number of state officials, have argued that EV fees are fair, since electric cars drive on roads but their drivers don’t pay gas tax to maintain them. That may sound reasonable on its surface, but ignores several key factors that make a flat fee unfair.

EV fees are flat, while gas tax varies with driving and efficiency

The average new gas car is rated at 27 MPG. At that efficiency, someone would have to drive around 7,000 miles a year to pay $100 in gas tax (this is the amount the bill specifies is “in lieu” of gas tax that EV drivers will now pay). However, if they drive less, they would pay less tax.

Meanwhile, an efficient gasoline vehicle, such as a Toyota Prius, would have to drive 14,400 miles to pay the same amount — more than the 12,000 miles driven by an average American. And again, the less a Prius is driven, the less its owner would pay in gas tax.

Conversely, the new EV fee is $100 no matter the distance the car is driven. Someone who uses an EV primarily for local errands or short commutes, and drives only a few thousand miles per year would pay the same fee as someone who drives for ride-sharing services or takes many long-distance trips. As such, while a flat fee is inequitable to the low-distance driver of an EV, it is also a suboptimal revenue source for the state, given that some people may drive far above average but pay the same flat amount.

In effect, a fee like this incentivizes more driving, since the owner of an EV would need to drive more to “make their money back” — which is surely not what the authors of this fee intended.

Trying to equate road use from gas cars and EVs ignores environmental externalities of ICE and benefits of EVs

The freshly adopted EV fee misses the reality that an EV is not just another vehicle on the road, albeit one which happens not to contribute to the current road revenue system.

Before this fee was added, EV owners did not have to explicitly pay for road maintenance, which, for sure, may seem unfair. However, wearing out roads is not the only damage caused by cars.

Exhaust from cars powered by internal combustion engines degrades air quality and contributes to climate change. While that damage may be harder to put into a dollar amount, negative effects of climate change are likely to significantly hurt our state’s economy. Hotter weather, combined with exhaust from vehicles, may cause thousands of premature deaths

Of course, EVs charged from fossil fuel-generated electricity also contribute to climate change, but as mentioned above, significantly less so than gasoline cars. And unlike gasoline cars, EVs get cleaner as our grid gains more renewable power, and can already be driven completely without emissions if charged from solar or wind.

Therefore, if our legislators want to adopt a truly fair and equitable system, they should consider the price of damage that ICE cars cause to our environment. They should consider the cost of air pollution to public health, especially in more disadvantaged communities in Illinois, where black children are three times more likely to suffer from asthma than white children. They should consider the cost of rising greenhouse gas emissions at a time when every major environmental organization is warning us that we need to act urgently and intentionally to avoid ecological disaster.

Then our legislators can balance those against the need to fund roads. We are certain they would find that, with EVs making up only a small fraction of cars in Illinois, their benefits far outweigh whatever wear they put on our roads.

We are not against EV fees in principle. We are against fees that are regressive and stay flat regardless of driving distance, efficiency, or income. We are against fees which are blind to the benefits of EVs. We are against fees which are imposed prematurely, before EVs in our state reach a critical mass — because a prematurely imposed fee can hurt or slow down the transition to EVs.

Our state may be in need of revenue right now, but we should not jeopardize our future and our long-term goals for the sake of short-term revenue. Unlike damage to roads, damage to our environment and climate cannot be easily fixed, and the time we lose in transitioning to cleaner transportation cannot be replaced.

If that transition slows down, we may not reach our climate goals as fast as we need to avoid the worst effects of climate change. And if we don’t avoid the worst effects of climate change, the cost to adapt to those effects is likely to significantly exceed whatever revenue the state would generate from fees on EVs right now.

Illinois offers no incentives for EVs. Letting electric cars use the roads “for free” was the only one, and it was just ended.

We will continue to work with our elected representatives, local and state officials, environmental allies, and members of the public to push Illinois to become the EV leader it once was, so we can stand a better chance of fighting environmental injustice and averting the impending climate crisis.

Chicago for EVs