One of the criticisms I often hear about Road Use Charging (RUC) is that it takes away a significant incentive for people to convert to electric vehicles (EVs) — namely the money they save by avoiding the gas pump.
While the average price to purchase an EV can be significantly higher than the average price of a comparable gasoline-powered vehicle, the actual cost to operate an EV is less.
But would the addition of a per-mile charge to compensate for lost gas tax revenue to fund highway expenses eliminate that benefit?
I took a deeper look into the matter to answer that question.
Why the Need for RUC?
Since 1932, the development, construction and maintenance of roads, bridges, interstate highways, and transit systems in the U.S. have been funded by federal- and state-levied taxes that are collected as part of the per gallon cost that drivers pay to fuel-up their vehicles at the gas station.
While EVs have equal access to use the same publicly funded roads and bridges, they pay no state or federal gasoline taxes when recharging their vehicles. Some states are now charging an annual fee to help close this revenue gap, but this approach does not take into account whether that vehicle was driven one mile or 100,000 miles that year.
On top of that, the significant weight difference of EVs, which can be hundreds to thousands of pounds heavier than gasoline-powered vehicles, causes more wear and tear on this essential infrastructure.
RUC is aimed at leveling the playing field for all vehicles using those same roads.
Electric vehicles have equal access to the same publicly funded roads and bridges as gasoline-powered vehicles, but pay no state or federal gasoline taxes when recharging.
Let’s Compare
To begin my investigation into determining if there was any truth to the perceptions that RUC makes EV ownership more expensive, I went to the U.S. Department of Energy (DOE) website and pulled data on ownership costs for a range of vehicles. I selected model year 2020 vehicle types from five broad groups: pickup trucks, sedans, sport utility vehicles, hybrids and EVs.
Next, I calculated a per-mile cost for each vehicle. Using DOE’s vehicle cost calculator, I was able to determine a basic ownership cost per mile for each of the vehicles in my sample. The numbers reflect a broad range of vehicle costs, including fuel (fossil fuels and electricity), maintenance, insurance and registration.
Without RUC, EVs cost between 4-to-6 cents less per mile to own and operate than internal combustion engine (ICE) sedans and SUVs, and 8-to-10 cents less per mile than pickup trucks.
Now, let’s compare this with some RUC rates and electric vehicle fees that have already been set by states with active systems:
- Oregon sets the per-mile RUC rate for its OReGO system at 1.7 cents per-mile, while the state’s gas tax is 34 cents per gallon.
- In Virginia, the rate likely to be applied under the state’s mileage-based user fee program works out to less than a penny per-mile.
Based on the DOE data, neither of these two state rates would increase the cost to own an electric vehicle, when compared with a traditional ICE vehicle.
Virginia and Utah offer usage-based programs as alternative assessment and reporting options for flat fees on electric vehicles. Utah currently levies an additional registration fee of $123 on EVs, while Virginia levies a Highway Use Fee of about $110 for EVs.
©WSP
Trey’s research included comparisons of the per-mile cost of vehicle ownership using several makes and models (all model years 2020).
The Road Ahead
None of these fees appear to increase the annual cost of owning an EV above the cost to operate ICE vehicles. In fact, my calculations show that a fee on EVs would have to be $600 per year before the per-mile annual costs for electric vehicles and ICE sedans even equalize.
The numbers I’ve shared aren’t intended to be definitive on the question of whether new fees make electric vehicles unaffordable or disincentivize their adoption. They are meant merely to provide an initial baseline for discussion, especially within states that are considering imposing these types of fees.
Much work is still needed. To have a productive dialogue, states should be ready to discuss what these drivers are paying now, not just in terms of taxes, but in vehicle ownership costs as well.
Experian’s quarterly Automotive Trends Report released in December 2023 said the percentage of EVs on U.S. roads had grown from a quarter of a percent in 2019 to more than one percent today. There are approximately three million EVs on U.S. roads, according to the report, so they are still a long way from catching up to the 274 million gas and hybrid vehicles owned in the U.S. today.
With that number growing every year, it is important to address the revenue shortfall sooner rather than later. But for consumers weighing the cost benefits of purchasing an EV vehicle versus an ICE vehicle, it seems that EVs offer long-term value in that regard, even with RUC factored into the equation.
Trey Baker is vice president for national tolling and managed lanes at WSP.
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