July 28, 2021
Vehicles have changed a lot over the past couple of decades, becoming more efficient as the world tries to go greener and use fewer fossil fuels. Electric vehicles save their owners money, help the planet, and are becoming more widespread every year. This trend is positive in many respects, but it poses a challenge in funding our roads and infrastructure. Right now, the gas tax supports these initiatives, and electric vehicles do not pay. As more electric vehicles hit the road, fewer people pay the gas tax, meaning less funding to pay for the roads they drive on. As a result, our infrastructure is crumbling. What is the solution? Road user charges are being proposed all over the country to pay for upgrades, repairs, and additions to our infrastructure. What are road user charges, and how will electric vehicles be affected?
The concept of road user charges has many different names. It is known as road usage charges (RUC), mileage-based user fees (MBUF), distance-based user fees (DBUF), or vehicle miles traveled tax (VMTT). All of these names refer to the same idea: drivers pay based on how many miles they drive. Ideally, this would replace the gas tax, which charges based on how many gallons of gas you use. The gas tax is outdated firstly because of electric and fuel-efficient vehicles, but secondly, it has not kept up with inflation in the last 25 years. In this time, the country’s population has only grown, increasing wear and tear on the roads and furthering our need for better infrastructure. There are many benefits to road usage charges, which we will outline below.
Road usage charges could bring in an additional $340 million in funding for America’s infrastructure. This money is desperately needed to repair our nation’s unsafe roads. On average, 49% of roads are in a dangerous state of disrepair in each state, causing 22,000 traffic fatalities and 38% of injuries each year.
Under the gas tax, electric vehicles and fuel-efficient vehicles pay little to nothing towards repairing and maintaining our infrastructure. This system does not make sense, as these vehicles use the roads just like everyone else and should pay for them. Under a road usage charge program, everyone would pay. Paying based on how much drivers use the road makes more sense as it directly correlates to how much wear and tear they inflict upon it. Drivers who use the road more will pay more towards its repair.
Drivers of regular vehicles will not see much of a difference in cost between the gas tax and road usage charges. When Kauai, Hawaii, was considering implementing road usage fees, they found that many drivers pay almost the same under both policies. Because a road user fee would also apply to fuel-efficient and fuel-independent vehicles, there will simply be more people paying into the Highway Trust Fund under a road usage charge. Therefore, people will be able to enjoy safer roads without any pain in their wallets.
A couple of states already have widespread road usage charge programs to great success. Oregon, for example, has OReGO. It uses easy to install hardware called Azuga Insight which simply plugs into the OBD port. Then, the driver simply sets up a wallet online and the system automatically deducts from their wallet as they drive. It offers limited administrative costs for the government and easy management for the driver. Azuga is working with other states to implement Azuga Insight in their future road usage charge programs as well.
If OReGO is an optional road usage charge program, how did they get electric vehicles to join? The answer is simple. Registration fees for electric vehicles are expensive, but owners get a hefty discount if they instead choose to opt for the OReGO program, allowing them to pay in increments based on how many miles they drive. In many instances, this winds up being less than the increased registration fees. Other states are likely to develop similar incentives to get electric vehicles to join their road usage charge programs.
We need a solution to our nation’s infrastructure problem, and road usage charging is looking like a highly probable solution for many states. Electric vehicles will only grow in numbers, and we need to ensure that we still have the funding to cover our roads and highways when they do. Azuga has created Azuga Insight to make it easier for states to implement road usage charges. Follow our blog to find out what the latest is in road usage charging news.