Federal Leadership

EV Taxes are a Flawed and Unfair Infrastructure Pay-For

June 17, 2021

Washington, D.C. – Details emerged today about the proposed funding mechanisms for a bipartisan group of senators’ infrastructure plan, and electric vehicle (EV) taxes were included as one of the plan’s pay-fors. The Zero Emission Transportation Association (ZETA) strongly urges lawmakers to reject this flawed and unfair pay-for.

“Let’s be clear—EV taxes are not about boosting revenue or creating fairness, and they should be rejected as a pay-for in any infrastructure bill,” said Joe Britton, the Executive Director of ZETA. “These consumer penalties are being pushed by oil refiners to deter EV adoption and to further lock us into a fossil fuel-based transportation system. These taxes would be a setback for domestic manufacturing too—particularly in the states that have benefited from EV and advanced battery manufacturing jobs in the past year, like Texas, Kentucky, Ohio, Tennessee, Alabama, Arizona, and the Carolinas. EV taxes punish consumers, worsen carbon emissions, and concede an ascendant American industry—and the hundreds of thousands of American jobs it is set to create—to foreign competitors like China.”

EV taxes are also a flawed pay-for, as illustrated by an analysis from the Congressional Budget Office that found an annual $100 EV tax would raise just $1.1 billion over the next five years—which is less than 0.19% of the total cost of this bipartisan infrastructure proposal and less than 0.05% of the total cost of President Biden’s American Jobs Plan. It is a penalizing burden for individual consumers, but isn’t a serious effort to fund anything.  

Furthermore, if Congress sought fairness in funding our infrastructure, lawmakers would pursue a technology-neutral system that treats all vehicles equitably based on road usage or vehicle miles traveled. For example, inherent in the gas tax is an efficiency incentive, where the less gas you use the less tax you pay. But an EV-specific tax takes the most efficient vehicles on the road and penalizes them as if they had the fuel economy of a 1980 sedan – or worse – and layers them on top of state taxes that charge EVs more than gas-powered vehicles.

“EV taxes punish consumers, take us in the wrong direction in reducing our carbon emissions, and are a setback for domestic manufacturing,” Britton added. “Congress must reject consumer penalties and ZETA will continue to advocate against the implementation of these new taxes.”

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About ZETA

National policies to support 100% electric vehicle sales.

The Zero Emission Transportation Association (ZETA) is a federal coalition focused on advocating for 100% EV sales by 2030. Enacting policies that drive EV adoption will create hundreds of thousands of jobs, secure American global EV manufacturing dominance, drastically improve public health, and significantly reduce carbon pollution.