TN Hybrid -EV Owners shocked by new state fees

[edwaleni]

https://www.wate.com/news/top-stories/hybrid-drivers-in-tn-surprised-by-100-extra-fee-for-registration/

Although he doesn't want to, begrudgingly, Guider will pay the $129 registration fee. Mr. Mullins doesn't like the added fee either.

"Not fair at all, not fair at all," Mullins said.

[kalvado]

Road taxes for EVs are a difficult topic for sure, but they have to happen.. 
I pay 2 cents in gas taxes per mile, give or take. That's on the same page as this EV surcharge.

[SectorZ]

If these guys get 45 MPG, and let's assume the avg. vehicle is 25 MPG, and they drive 10,000 miles annually, that's 178 gallons difference (400 to 222). At their 26 cent/gallon gas tax, that's about $46.

So I guess the charge overshoots the gas tax revenue lost by a fair bit.

[Life in Paradise]

https://www.wate.com/news/top-stories/hybrid-drivers-in-tn-surprised-by-100-extra-fee-for-registration/

Although he doesn't want to, begrudgingly, Guider will pay the $129 registration fee. Mr. Mullins doesn't like the added fee either.

"Not fair at all, not fair at all," Mullins said.

I'm sure that this was publicized last year by Tennessee news sources; someone missed the news. 

Truth is that, yes, governments will need tax money to fund roads and hybrids pay less and EVs nothing.  A flat amount is not necessarily fair since the EV version of a larger vehicle (Ford Lightning) will most likely save more gas tax money since it replaces more gallons than a small economy car, and then there is question of fairness compared to how many miles a person drives a year.

[edwaleni]

In Illinois, EV's pay a $1400 fee upfront at purchase.  Which means it not only gets into your financing, but cuts into your tax credit.

I would like to think a smaller, annual fee is more "fair".

[hbelkins]

What's the old saying? "If it moves, tax it. If it quits moving, subsidize it."

[kalvado]

If these guys get 45 MPG, and let's assume the avg. vehicle is 25 MPG, and they drive 10,000 miles annually, that's 178 gallons difference (400 to 222). At their 26 cent/gallon gas tax, that's about $46.

So I guess the charge overshoots the gas tax revenue lost by a fair bit.

I believe 12-13k miles is a more realistic estimate. Yet probably overcharging hybrids.
EVs being heavier than regular cars can be justified at 15-20 MPG rate tax.

Yet, flat rate is a very crude approximation here. But I don't see a simple solution here...

[Max Rockatansky]

What is the more bitter pill?  I assume most would prefer an increased EV/Hybrid registration fee over something like a mileage tax.  The free lunch has to become something tangible eventually with EVs and hybrids having an increased market share. 

[hotdogPi]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

[Max Rockatansky]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

The problem is that they are not ready to be the predominant form of automotive transportation in the United States.  Build a better charging network, improve range and get priced competitive with ICE first.  Artificially stacking the deck with tax credits and waivers on things like having to pay a gas tax equivalent won't work forever.  If the mandates were going to start somewhere it should have begun with hybrid capabilities for most ICE vehicles. 

Right now even with everything going on a lot of EV buyers make their purchase as a quasi-luxury item.  The market was dictating a shift towards hybrid and EV options just fine.

Interesting aside, we talked about this with my father in law this week while down in Mexico.  I couldn't fathom EVs or hybrids taking the slightest foothold here for decades to come with all the 30-40 year old clunkers still in use.  The concept of a reliable charging grid in rural Jalisco is amusing to contemplate.

[SectorZ]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Look at our state, where someone with a brand new Honda Civic pays about $625 in excise tax, but someone with a 5+ year old Chevy Suburban pays $125 (making math assumptions of $25K and $50K MSRP value of the vehicles in question). One destroys the road hardcore over the other, yet we penalize the person getting 35 MPG in their 3,000 pound car and reward the person getting 15 MPG in their 6,500 pound SUV. If you remember years ago (about 20 by now), the feds were giving $500 credits to people buying hybrid Tahoes, which got half the gas mileage of three of the four new vehicles I've owned in my life.

They should be taxed based on how much they destroy roads, not solely by the altruism of their use, especially given the obesity involved in an EV being able to move itself.

[Max Rockatansky]

In that line of thought, most EVs are far from light weight.  Battery sleds tend to carry a lot of girth even in seemingly smaller cars.

[kphoger]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Funding roads by the gas tax exclusively seems to go against the stated goal of transitioning away from fossil fuels.  If we get rid of ICE cars, then who's paying the gas tax?

[kalvado]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Look at our state, where someone with a brand new Honda Civic pays about $625 in excise tax, but someone with a 5+ year old Chevy Suburban pays $125 (making math assumptions of $25K and $50K MSRP value of the vehicles in question). One destroys the road hardcore over the other, yet we penalize the person getting 35 MPG in their 3,000 pound car and reward the person getting 15 MPG in their 6,500 pound SUV. If you remember years ago (about 20 by now), the feds were giving $500 credits to people buying hybrid Tahoes, which got half the gas mileage of three of the four new vehicles I've owned in my life.

They should be taxed based on how much they destroy roads, not solely by the altruism of their use, especially given the obesity involved in an EV being able to move itself.

In a very ideal world, weight and mileage should come into play. Both sort-of kind-of worked with plain gas engine. Commercial trucks get another layer of taxation.
With more emphases on fuel efficiency, hybrids, and EV - idea  breaks down.

Taxing everyone based on weight and mileage seems great until all small details (state of registration vs state where miles are driven, odometer tampering, GPS too intrusive etc etc)  come up.
For EVs and cars with more powerful on-board computing (aka every newer car) mileage reporting without tampering possibility and privacy issues may be possible. But not there yet. 

[edwaleni]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

If you happen to peruse the article in the link, you will notice that the Hybrid/EV annual tax in TN is indexed to inflation going forward.

Which is interesting in that fuel taxes are not, they are at a fixed percentage until legislative action changes it.

If EV use hits its predicted 15% market share by 2035, its possible they could be contributing much more than 15% of the revenue.

[1995hoo]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Why the heck should everyone else pay more to give the EV drivers free access to the roads? That's bullshit.

Virginia has a "highway use fee" that's based on a vehicle's fuel efficiency using a complicated formula. EV and hybrid drivers pay more, but some gas car owners pay too—my wife had to pay it last year when we renewed her registration, although the amount was relatively low. The theory is to try to approximate the notion that everyone should be paying approximately the same in taxes towards the roads.

[hotdogPi]

I might have used the wrong wording. I'm opposed to the extra fee, not the already-existing excise tax.

[JayhawkCO]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Why the heck should everyone else pay more to give the EV drivers free access to the roads? That's bullshit.

Virginia has a "highway use fee" that's based on a vehicle's fuel efficiency using a complicated formula. EV and hybrid drivers pay more, but some gas car owners pay too—my wife had to pay it last year when we renewed her registration, although the amount was relatively low. The theory is to try to approximate the notion that everyone should be paying approximately the same in taxes towards the roads.

I do think that LONG TERM, once EVs are priced similarly, chargers are everywhere, blah, blah, blah, then it makes some sense for gas users to have to pay more for road access, but until that point, it needs to be spread somewhat equitably as you described for Virginia.

[Mapmikey]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Why the heck should everyone else pay more to give the EV drivers free access to the roads? That's bullshit.

Virginia has a "highway use fee" that's based on a vehicle's fuel efficiency using a complicated formula. EV and hybrid drivers pay more, but some gas car owners pay too—my wife had to pay it last year when we renewed her registration, although the amount was relatively low. The theory is to try to approximate the notion that everyone should be paying approximately the same in taxes towards the roads.

In Virginia if you are subject to the highway use fee you can elect to pay per mile (using a device installed on the vehicle) that maxes out at the nominal use fee.  So someone (not me) who doesn't drive much can pay less if they enroll in this program.

[JayhawkCO]

EVs should not be taxed, as that discourages their use. Raise the gas tax and index it to inflation.

Why the heck should everyone else pay more to give the EV drivers free access to the roads? That's bullshit.

Virginia has a "highway use fee" that's based on a vehicle's fuel efficiency using a complicated formula. EV and hybrid drivers pay more, but some gas car owners pay too—my wife had to pay it last year when we renewed her registration, although the amount was relatively low. The theory is to try to approximate the notion that everyone should be paying approximately the same in taxes towards the roads.

In Virginia if you are subject to the highway use fee you can elect to pay per mile (using a device installed on the vehicle) that maxes out at the nominal use fee.  So someone (not me) who doesn't drive much can pay less if they enroll in this program.

I like that idea, too.

[kalvado]

I might have used the wrong wording. I'm opposed to the extra fee, not the already-existing excise tax.

Different taxes go (at least should go) to different accounts.  From my perspective, dedicated federal highway fund is how things should work on a state level as well. And there is no reason EVs shouldn't be contributing their "fair share". Definition of "fair" is always difficult though

[kphoger]

In Virginia if you are subject to the highway use fee you can elect to pay per mile (using a device installed on the vehicle) that maxes out at the nominal use fee.  So someone (not me) who doesn't drive much can pay less if they enroll in this program.

Does it only count miles driven in-state?

[Mapmikey]

In Virginia if you are subject to the highway use fee you can elect to pay per mile (using a device installed on the vehicle) that maxes out at the nominal use fee.  So someone (not me) who doesn't drive much can pay less if they enroll in this program.

Does it only count miles driven in-state?

No.

From the DMV webpage:

Will I be charged for miles driven outside Virginia or on private roads?

Yes. At this time, the Mileage Choice Program does not differentiate between miles driven outside of Virginia or on private roads versus inside Virginia and public roads.

[ZLoth]

The challenge is that funding for road construction, maintenance, and improvement is supposed to come from vehicle registration fees and taxes on fuel purposes although, in some cases, it gets diverted to public transportation. First you improve the fuel economy "to save the planet!!!", and whoops, you decrease your fuel consumption which leads to decreased tax revenue. Now, there is that encouragement to use Electric Vehicles "to save the planet!!!", but you just cut out the fuel tax revenue.

[Max Rockatansky]

I always thought "save the planet" was an odd thing to say.  All cellular life in theory could be wiped out at any time due to cosmic events.