Planning for State Transportation Revenue in a Coming Era of Electric Vehicles

Even before the increasing popularity of electric vehicles, states have been grappling with growing shortfalls in funding a modern, well-functioning transportation infrastructure. According to an estimate from the American Society of Civil Engineers, $1.4 trillion in additional funding is required to meet the country’s infrastructure needs by 2025. And traditional funding models that rely on user fees — gas taxes, tolls, vehicle registration fees — are increasingly ill-matched to the reality of transportation, which includes more efficient vehicles and those that run entirely on electric power. In 1965, user revenue accounted nearly 75 percent of spending, as of 2012, it has fallen to under 50 percent.

The growing popularity of EVs is adding to states’ concerns about transportation funding. Vehicle electrification will ultimately lessen a mainstay of traditional sources of funding for the transportation system: motor fuel taxes. However, EVs currently make up less than 1 percent of the nation’s total fleet and only 2 percent of new sales across the United States. This white paper examines a variety of funding methods in an era of increased electrification of the transportation sector. In addition, it highlights best practices from across the country.

Download the white paper here.