States debate taxing green cars to recover lost gas taxes
Skip to main content
Sister Publication Links
  • Automotive News Canada
  • Automotive News Europe
  • Automotive News China
  • Automobilwoche
AN-LOGO-BLUE
Subscribe
  • Subscribe
  • Account
  • login
  • HOME
  • NEWS
    • Dealers
    • Automakers & Suppliers
    • News by Brand
    • Cars & Concepts
    • Coronavirus Coverage
    • China
    • Shift
    • Mobility Report
    • Special Reports
    • Digital Edition Archive
    • This Week's Issue
    • CarMax
      CarMax plans bonuses for 22,000 employees to reward pandemic efforts
      COVID-19 vaccines reaching auto plants, but challenges remain
      Working online to book COVID shots, office manager Billie Jean Pellet “typed so fast smoke came off the keyboard,” said dealer Earl Stewart.
      Dealership team hunts for vaccine
      Hope stalls for rebound in European auto sales
    • Sanden's plant in the north China port city of Tianjin
      Hisense to acquire Japanese auto air-conditioner maker Sanden
      A Cadillac XT5 fitted with the 48-volt system 
      Cadillac launches XT5, XT6 fitted with 48-volt system
      Chinese tech companies are turning their sights on EVs
      Telecom firm ZTE preparing electric vehicle product line
      Changan
      Huawei, battered by U.S. sanctions, plans foray into EVs, report says
    • Udelv CEO offers a historical perspective on high-tech goods delivery
      Q&A with BrightDrop CEO Travis Katz
      Automakers optimize manufacturing, customize products through digitization
      3D-printing a Porsche: Making concepts matter
    • driverless-vehicle interior
      Consumers fear self-driving future, but like the tech that blazes the path
      The Cruise AV autonomous vehicle, based on the Chevy Bolt
      GM-backed Cruise is in talks to buy startup Voyage, report says
      Fisker's next wave: A premium people's car
      A worker fixes a power line in Austin, Texas, last month.
      Bidirectional EVs could lend a hand in power crisis
    • Elon Musk interview
      Tesla’s Model Y, on sale since March, is a showcase of EV technologies competitors will benchmark.
      Technologies of Electrification
      Cadillac’s Lyriq EV will be unveiled Aug. 6.
      Future Product Pipeline
      A CALL TO ACTION
    • driverless-vehicle interior
      Consumers fear self-driving future, but like the tech that blazes the path
      Ikuo Mori, then Fuji Heavy Industries CEO and Tom Doll, stand alongside the redesigned 2009 Subaru Forester, which debuted at the 2008 Detroit auto show. The redesigned crossover helped kick-start Subaru's U.S. sales growth.
      How Subaru survived and thrived after 2011 quake
      President Joe Biden’s nomination of FTC member Rohit Chopra as director of the CFPB signals that it could be a “much more activist bureau.”
      White House could shake up auto finance
      COVID-19 vaccines reaching auto plants, but challenges remain
    • Access F&I
    • Fixed Ops Journal
    • Marketing
    • Used Cars
    • Retail Technology
    • Sales
    • Best Practices
    • Dealership Buy/Sell
    • NADA
    • NADA Show
    • Automakers
    • Manufacturing
    • Suppliers
    • Regulations & Safety
    • Executives
    • Talk From The Top
    • Leading Women Network
    • Guide to Economic Development
    • PACE Awards
    • Management Briefing Seminars
    • World Congress
    • Aston Martin
    • BMW
      • Mini
      • Rolls-Royce
    • Daimler
      • Mercedes Benz
      • Smart
    • Ford
      • Lincoln
    • General Motors
      • Buick
      • Cadillac
      • Chevrolet
      • GMC
    • Honda
      • Acura
    • Hyundai
      • Genesis
      • Kia
    • Mazda
    • McLaren
    • Mitsubishi
    • Nissan
      • Infiniti
    • Stellantis
      • Alfa Romeo
      • Citroen
      • Chrysler
      • Dodge
      • Ferrari
      • Fiat
      • Jeep
      • Lancia
      • Maserati
      • Opel
      • Peugeot
      • Ram
      • Vauxhall
    • Renault
    • Subaru
    • Suzuki
    • Tata
      • Jaguar
      • Land Rover
    • Tesla
    • Toyota
      • Lexus
    • Volkswagen
      • Audi
      • Bentley
      • Bugatti
      • Lamborghini
      • Porsche
      • Seat
      • Skoda
    • Volvo
    • (Discontinued Brands)
    • Virtual reveals (Sponsored)
      • MITSUBISHI: 2022 Outlander
      • NISSAN: 2022 Pathfinder and 2022 Frontier
      • GENESIS: 2021 GV80
      • KIA: 2021 K5
      • LEXUS: 2021 IS
      • NISSAN: 2021 Rogue
      • TOYOTA: 2021 Venza and 2021 Sienna
    • Auto Shows
    • Future Product Pipeline
    • Photo Galleries
    • Car Cutaways
    • Design
  • OPINION
    • Blogs
    • Cartoons
    • Keith Crain
    • Automotive Views with Jason Stein
    • Columnists
    • China Commentary
    • Editorials
    • Letters to the Editor
    • Send us a Letter
    • The new Stellantis pickup: Schrödinger's Dakota
      Fisker gets a rare second chance to build his own car company
      Gerry McGovern is right man to steer Jaguar reinvention
      Forget the Ford GT; Moray Callum's biggest hit is the aluminum F-150
    • Jaguar is about to undergo its fourth reinvention in five decades as owner Tata Group takes a second crack at shaking up a brand whose glorious past has rarely translated into a profitable present or sustainable future.
      Jaguar Redo, Part IV
      view gallery
      1 photos
      Chip Shortage
      Record Dealer Profits
      view gallery
      10 photos
      Leo Michael Cartoons - Q1 2021
      Dealers hiring from hospitality sector
      view gallery
      1 photos
      Hospitality Hires
    • Shifting gears away from the stick shift
      SEMA still a wonderful circus
      Penske still has plenty of races to win
      Ford's turn in the hot seat
    • March 2, 2021 | Will EV bets pay off?
      February 23, 2021 | Reliability continues to soar
      February 16, 2021 | Apple looks to take bite out of automotive
      February 9, 2021 | ‘Super’ opportunity for automakers
    • Reinvention of Jaguar is a tall task for McGovern
      Jamie Butters
      EV plans and some damn lies
      Mark Paul
      What dealers can do if D.C. power shift affects recalls
      Are we in the midst of a fourth industrial revolution?
    • Geely HQ
      Why Geely wants to be a contract manufacturer
      Shanghai hints at how Chinese cities will pursue electrification
      How Tesla, GM transformed EV market in 2020
      Is sales recovery nearing an end?
    • U.S. Dealership lot
      Lean lots won't last without new dealer discipline
      Taiwan Semicon microchips BB web.jpg
      Chip shortage shows need for new thinking
      Digital demands squeeze smaller auto retailers
      President Joe Biden’s move to electrify all government vehicles could push forward charging infrastructure development.
      Dealers aren't wrong to be wary of EV hype
    • New look at Nissan a positive sign
      Embrace EV ideas at our doorstep
      Dealers are right to worry about EVs
      Buying EV without dealer is just easier
  • DATA CENTER
  • VIDEO
    • AutoNews Now
    • First Shift
    • Special Video Reports
    • Weekend Drive
    • AutoNews Now: Peugeot's U.S. comeback uncertain amid Alfa Romeo appointment
      AutoNews Now: Next parts shortage could be foam for seats
      AutoNews Now: Chip woes persist: GM extending output cuts
      AutoNews Now: Toyota, Mazda, Subaru, Hyundai, Kia slide in Feb.; Volvo, Genesis rise
    • First Shift: Ford criticized by ITC for SK Innovation battery deal
      First Shift: GM, LG Chem mull second U.S. battery plant
      First Shift: Stellantis aims for higher profit margins in 2021
      First Shift: Volvo's electric push includes online-only sales
    • Bert Ogden Auto Group
      How a Texas group is cutting costs, saving millions
      COVID, chips and checks: Sales headwinds and tailwinds for 2021
      N.J. dealer helps position peers for ‘electric revolution’
      DCH Millburn Audi
      'Finding the diamond in the rough': How 2020's No. 1 dealership retains talent
    • Why the pickup is the auto industry's 'battleground'
      Carlos Ghosn's quest to restore his reputation
      Why Ford must execute to avoid 'deep trouble'
      Why Honda is 'locked and loaded' for 2020
  • EVENTS & AWARDS
    • Events
    • Awards
    • Congress Conversations
    • Retail Forum: NADA
    • Canada Congress
    • Europe Congress Conversations
    • Leading Women Conference
    • Fixed Ops Journal Forum
    • ANE Shift
    • Shift: Mobility at a Crossroads
    • Shift: The Future of Mobility (CES)
    • 100 Leading Women
    • 40 Under 40 Retail
    • All-Stars
    • Best Dealerships To Work For
    • PACE Program
    • Rising Stars
    • Europe Rising Stars
  • JOBS
  • AN Solutions
  • +MORE
    • Leading Women Network
    • Podcasts
    • Webinars
    • In the Driver's Seat
    • Publishing Partners
    • Classifieds
    • Companies on the Move
    • People on the Move
    • Newsletters
    • Contact Us
    • Media Kit
    • RSS Feeds
    • Shift: A Podcast About Mobility
    • Special Reports Podcasts
    • Daily Drive Podcasts
    • AAM
    • DealerPolicy
    • Gentex
    • Reputation.com
    • Ricardo
    • Ricardo
    • Allstate: Want more from your F&I?
    • Ally: Navigating the future of automotive retailing
    • Amazon Web Services: Any place, any time, any channel
    • Amazon Web Services: The power of the cloud
    • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
    • Epic Games: Transforming the auto industry with digital assets
    • FTI Consulting: Crisis as a catalyst for change
    • Google: 5 trends shaping the auto industry's approach to a new normal
    • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
    • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
    • IHS Markit: COVID-19: The future mobility delusion
    • Level5: 2020 Automotive E-Commerce Report
    • Naked Lime: Bring social reputation together as part of big-picture marketing
    • Wells Fargo Auto: Switching gears from LIBOR to SOFR
    • Ally: Do It Right
    • DealerSocket
    • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
    • Facebook: The road to a zero-friction future
    • Guide To Economic Development
    • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
MENU
Breadcrumb
  1. Home
  2. Mobility Report
June 09, 2013 01:00 AM

States debate taxing green cars to recover lost gas taxes

Alison Vekshin
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Toyota has sold 3.6 million Prius vehicles globally since the car's launch in 1997. Toyota contends it is unfair to levy taxes on such vehicles.

    SAN FRANCISCO (Bloomberg) -- Hybrid and electric cars are sparing the environment. Critics say they're hurting the roads.

    The popularity of these fuel-efficient vehicles is being blamed for a drop in gasoline taxes that pay for local highway and bridge maintenance, with three states enacting rules to make up the losses with added fees on the cars and at least five others weighing similar legislation.

    "The intent is that people who use the roads pay for them," said Arizona state Senator Steve Farley, a Democrat from Tucson who wrote a bill to tax electric cars. "Just because we have somebody who is getting out of doing it because they have an alternative form of fuel, that doesn't mean they shouldn't pay for the roads."

    State and local gas-tax revenue has declined every year since 2004, falling 7 percent to $37.9 billion in 2010, according to inflation-adjusted data from the Institute on Taxation and Economic Policy, a Washington-based nonpartisan research group.

    U.S. sales of electric and hybrid cars have soared over the last ten years and the trend continued in 2012.

    Last year, for example, Toyota Motor Corp. sold 236,659 Prius hybrids -- a 73 percent gain over 2011 sales, according to the Automotive News Data Center. General Motors sold 23,461 Chevy Volt hybrids, more than double the number sold in 2011. Nissan sold 9,819 all-electric Leafs in 2012, about the same as the year before.

    Electric, hybrid and plug-in hybrid auto sales jumped almost 60 percent in 2012 from the preceding year, representing 3.3 percent of the 14.4 million cars sold, the data showed.

    Opponents say taxing the vehicles contradicts government promotion of renewable energy, and the hybrid-electric share of the auto market is too little to cut into taxes. The federal government offers a tax credit from $2,500 to $7,500 on the purchase of a new plug-in electric car based on the traction battery capacity and the gross weight rating.

    'At odds'

    Boosting taxes "for people who want to use less gas is at odds with policies that are trying to make it easier for people who want to adopt clean and efficient technologies," Genevieve Cullen, vice president of the Electric Drive Transportation Association, a Washington-based industry group, said in a telephone interview.

    Fuel taxes provide close to 40 percent of state revenue for highways, according to a 2012 report by the National Conference of State Legislatures.

    "Yet these revenues have not kept pace with needs, partly due to changing travel patterns and fewer miles driven nationwide," the report said. "Improvements in vehicle fuel efficiency and growing use of alternative fuels also present serious challenges."

    More efficient

    Tax collections have declined relative to the amount of driving as cars become more efficient, said John DeCicco, a research professor specializing in transportation energy use at the University of Michigan Energy Institute in Ann Arbor, Mich.

    "The larger issue is not electric cars as regular cars are getting more efficient," he said in an interview. "More miles per gallon means less gas tax per mile. That's the crux of the problem."

    In Washington state, electric-car owners this year began paying a $100 annual fee. Virginia in April approved a $64 annual fee on hybrid and electric cars.

    In New Jersey, Senator Jim Whelan, a Democrat from Atlantic City, has proposed a $50 annual fee on electric and compressed natural-gas cars that would be deposited into a state fund for road and bridge maintenance.

    Free ride

    "Those of us who drive gas-powered vehicles, which is 98 percent of the people in our state, are contributing to the transportation trust fund," Whelan said at a May 20 hearing.

    "The 2 percent who are driving electric cars or compressed natural-gas cars drive the same roads and bridges that we do -- they currently contribute zero. They literally get a free ride."

    The state offers a 10 percent discount on off-peak New Jersey Turnpike and Garden State Parkway tolls through E-Z Pass for cars that get at least 45 miles per gallon.

    In Arizona, Farley's measure, which has stalled, would impose a tax on electric cars of 1 cent per mile driven on the state's highways, amounting to about $120 annually per car, he said. Texas lawmakers considered a similar bill this year.

    In Indiana, lawmakers created a committee to study a local road impact fee on electric and hybrid cars to be paid at registration.

    North Carolina's Senate on May 23 approved a budget plan that includes a $100 fee for electric cars and $50 for hybrid cars, said Amy Auth, deputy chief of staff for Phil Berger, Senate president pro tempore. The plan has gone to the House for review, she said.

    Unfair tax

    Tom Stricker, vice president of technical and regulatory affairs at Toyota Motor North America, said it's unfair to single out hybrids for an additional tax.

    "A compact gasoline car may consume less fuel and pay less gasoline tax than a hybrid SUV, but only the hybrid SUV would be subject to an additional tax," Stricker said in an e-mailed response to questions.

    The approach is "wholly inconsistent" with federal and state government efforts to spur technology innovation, improve fuel economy and reduce greenhouse-gas emissions, he said.

    RECOMMENDED FOR YOU
    Consumers fear self-driving future, but like the tech that blazes the path
    Letter
    to the
    Editor

     

     

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Consumers fear self-driving future, but like the tech that blazes the path
    Consumers fear self-driving future, but like the tech that blazes the path
    GM-backed Cruise is in talks to buy startup Voyage, report says
    GM-backed Cruise is in talks to buy startup Voyage, report says
    Fisker's next wave: A premium people's car
    Fisker's next wave: A premium people's car
    Sponsored Content: New Data Report: F&I’s Role in Digital Retailing
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    See more newsletter options at autonews.com/newsletters.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Digital Edition
    Automotive News 3-1-21
    THIS WEEK'S EDITION
    See our archive
    Fixed Ops Journal
    Fixed Ops Journal 2-8-21
    Read the issue
    See our archive
    MOBILITY REPORT NEWSLETTER: Sign up for our Thursday afternoon Mobility Report newsletter, your one-stop shop for the latest developments at the intersection of transportation and technology.
    WEEKLY NEWSLETTER: Sign up to start your week with the top stories from the latest issue of Automotive News, delivered to your inbox first thing each Monday morning.
    DAILY NEWSLETTER: Sign up to get the top stories of the day in your inbox every business weekday afternoon.
    Get Free Newsletters

    Sign up and get the best of Automotive News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    Subscribe Now
    Connect With Us
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Our mission

    The Automotive News mission is to be the primary source of industry news, data and understanding for the industry's decision-makers interested in North America.

    AN-LOGO-BLUE
    Contact Us

    1155 Gratiot Avenue
    Detroit, Michigan
    48207-2997

    (877) 812-1584

    Email us

    Automotive News
    ISSN 0005-1551 (print)
    ISSN 1557-7686 (online)

    Fixed Ops Journal
    ISSN 2576-1064 (print)
    ISSN 2576-1072 (online)

    Resources
    • About us
    • Contact Us
    • Media Kit
    • Subscribe
    • Manage your account
    • Reprints
    • Ad Choices Ad Choices
    • Sitemap
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • HOME
    • NEWS
      • Dealers
        • Access F&I
        • Fixed Ops Journal
        • Marketing
        • Used Cars
        • Retail Technology
        • Sales
        • Best Practices
        • Dealership Buy/Sell
        • NADA
        • NADA Show
      • Automakers & Suppliers
        • Automakers
        • Manufacturing
        • Suppliers
        • Regulations & Safety
        • Executives
        • Talk From The Top
        • Leading Women Network
        • Guide to Economic Development
        • PACE Awards
        • Management Briefing Seminars
        • World Congress
      • News by Brand
        • Aston Martin
        • BMW
          • Mini
          • Rolls-Royce
        • Daimler
          • Mercedes Benz
          • Smart
        • Ford
          • Lincoln
        • General Motors
          • Buick
          • Cadillac
          • Chevrolet
          • GMC
        • Honda
          • Acura
        • Hyundai
          • Genesis
          • Kia
        • Mazda
        • McLaren
        • Mitsubishi
        • Nissan
          • Infiniti
        • Stellantis
          • Alfa Romeo
          • Citroen
          • Chrysler
          • Dodge
          • Ferrari
          • Fiat
          • Jeep
          • Lancia
          • Maserati
          • Opel
          • Peugeot
          • Ram
          • Vauxhall
        • Renault
        • Subaru
        • Suzuki
        • Tata
          • Jaguar
          • Land Rover
        • Tesla
        • Toyota
          • Lexus
        • Volkswagen
          • Audi
          • Bentley
          • Bugatti
          • Lamborghini
          • Porsche
          • Seat
          • Skoda
        • Volvo
        • (Discontinued Brands)
      • Cars & Concepts
        • Virtual reveals (Sponsored)
          • MITSUBISHI: 2022 Outlander
          • NISSAN: 2022 Pathfinder and 2022 Frontier
          • GENESIS: 2021 GV80
          • KIA: 2021 K5
          • LEXUS: 2021 IS
          • NISSAN: 2021 Rogue
          • TOYOTA: 2021 Venza and 2021 Sienna
        • Auto Shows
        • Future Product Pipeline
        • Photo Galleries
        • Car Cutaways
        • Design
      • Coronavirus Coverage
      • China
      • Shift
      • Mobility Report
      • Special Reports
      • Digital Edition Archive
      • This Week's Issue
    • OPINION
      • Blogs
      • Cartoons
      • Keith Crain
      • Automotive Views with Jason Stein
      • Columnists
      • China Commentary
      • Editorials
      • Letters to the Editor
      • Send us a Letter
    • DATA CENTER
    • VIDEO
      • AutoNews Now
      • First Shift
      • Special Video Reports
      • Weekend Drive
    • EVENTS & AWARDS
      • Events
        • Congress Conversations
        • Retail Forum: NADA
        • Canada Congress
        • Europe Congress Conversations
        • Leading Women Conference
        • Fixed Ops Journal Forum
        • ANE Shift
        • Shift: Mobility at a Crossroads
        • Shift: The Future of Mobility (CES)
      • Awards
        • 100 Leading Women
        • 40 Under 40 Retail
        • All-Stars
        • Best Dealerships To Work For
        • PACE Program
        • Rising Stars
        • Europe Rising Stars
    • JOBS
    • AN Solutions
    • +MORE
      • Leading Women Network
      • Podcasts
        • Shift: A Podcast About Mobility
        • Special Reports Podcasts
        • Daily Drive Podcasts
      • Webinars
      • In the Driver's Seat
        • AAM
        • DealerPolicy
        • Gentex
        • Reputation.com
        • Ricardo
        • Ricardo
      • Publishing Partners
        • Allstate: Want more from your F&I?
        • Ally: Navigating the future of automotive retailing
        • Amazon Web Services: Any place, any time, any channel
        • Amazon Web Services: The power of the cloud
        • Amazon Web Services: Universal translator: Harnessing sensor data to build better automotive software
        • Epic Games: Transforming the auto industry with digital assets
        • FTI Consulting: Crisis as a catalyst for change
        • Google: 5 trends shaping the auto industry's approach to a new normal
        • IHS Markit: Automotive loyalty in the wake of the COVID-19 recession
        • IHS Markit: Autonomous vehicles: Automotive and transportation disruption
        • IHS Markit: COVID-19: The future mobility delusion
        • Level5: 2020 Automotive E-Commerce Report
        • Naked Lime: Bring social reputation together as part of big-picture marketing
        • Wells Fargo Auto: Switching gears from LIBOR to SOFR
        • Ally: Do It Right
        • DealerSocket
        • Deloitte: Cyber everywhere: Preparing for automotive safety in the face of cyber threats
        • Facebook: The road to a zero-friction future
        • Guide To Economic Development
        • PayPal Credit: How consumer financing helps drive sales for online auto parts retailers
      • Classifieds
      • Companies on the Move
      • People on the Move
      • Newsletters
      • Contact Us
      • Media Kit
      • RSS Feeds