How do we fund our roads? A case of decreasing revenue from electric vehicles
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How do we fund our roads? A case of decreasing revenue from electric
vehicles
Alan JennPhD Candidate
Carnegie Mellon University
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Running out of money for our transportation infrastructure
Source: Bradley, Bill, Tom Ridge, David Walker. “Road to Recovery: Transforming America’s Transportation”. Leadership Initiative on Transportation Solvency. Carnegie Endowment for International Peace. 2011. p.17
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Where do transportationfunds come from?
One time payments
Sales TaxTitling Fees
Use Fees
Federal Fuel TaxState Fuel Tax
Annual Fees
Registration FeesInspection Fees
Image Sources:http://cimg.internetbrands.com/www.carsdirect.com/330x185/564/used-car-dealer-prices-1564.jpg
http://newsbusters.org/sites/default/files/main_photos/2012/February/Gas%20223.jpghttp://www.plateshack.com/y2k/Pennsylvania5/pa2013sticker.jpg
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Variance of annual fees by state
Registration Fees
Flat fees, annually
or biannuall
y
% of vehicle MSRP
Categorical by
weight, age, or other
characteristic• Alabama
• Alaska• Connecticut• Delaware• Georgia• Illinois• Indiana• Kentucky• Maine• Massachuse
tts• Mississippi• Nebraska• Nevada
• North Carolina
• Oregon• Pennsylvani
a• South
Carolina• Tennessee• Utah• Vermont• West
Virginia• Wisconsin
• Arizona• Colorad
o• Louisian
a• Michiga
n• Minnes
ota• Wyomin
g
• Arkansas• California• Florida• Hawaii• Idaho• Iowa• Kansas• Maryland• Missouri• Montana• New
Hampshire• New Jersey
• New Mexico• New York• North
Dakota• Oklahoma• Rhode
Island• South
Dakota• Texas• Virginia• Washington
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No use fees for electric vehicles (EVs)
• When EVs operate on battery power, traditional forms of revenue flow is bypassed
• Is this a problem for transportation revenues?
Image Sources:http://www.extremetech.com/wp-content/uploads/2012/01/Nissan_Leaf.jpghttp://www.blogcdn.com/www.autoblog.com/media/2011/01/volt-charging-port.jpg
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Sales of EVs are small, for now…
Figure 1: Historical Sales of Electric Vehicles by Model
Figure 2: EIA Forecasts of Electric Vehicle Sales by
category
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Lifetime fees from a Toyota Camry
Figure 3: Spatial breakdown of lifetime fees for Toyota Camry
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Lifetime fees from a Chevrolet Volt
Figure 4: Spatial breakdown of lifetime fees for Chevrolet Volt
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Lifetime fees from a Nissan Leaf
Figure 5: Spatial breakdown of lifetime fees for Nissan Leaf
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Predicting losses in future revenue
Large sources of uncertainty
EIA Projections (use 2013 AEO)
Vehicle travel behavior and
lifetime (assume
average of 12,000 mi, 12
years)
Baseline of comparison
(against growth of average
midsize Toyota Camry)
State sales distribution
(proxy against distribution of Toyota Priuses)
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Average distribution of Prius sales over the last decade
Figure 6: Percentage of Prius sales versus total sales by state
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Difference in distribution of Prius sales versus total sales over the last decade
Figure 7: Difference in percentage of Prius salesversus total sales and average percent sales by model, by state
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Decrease in funding likely to be several hundred million dollars by 2025
• On a national scale, impact is relatively small but growing
• Higher rates of EV adoption will compound existing issues with transportation infrastructure funding deficits
• Future planning to address issue is necessaryFigure 8: Annual revenue decreases
from EVs
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Other funding schemes• Annualized fees (likely coupled
through registration fees)– Link to initial price of the vehicle–Use fee based on mileage of vehicle
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Sensitivity analysis on possible revenue generation plans
Figure 9: Cumulative revenue sensitivity to a percent MSRP based registration fee
Figure 10: Cumulative revenue sensitivity to a per mile based use fee
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Conflicting policies
Incentivize EVs
• Monetary tax credits• Carpool lane access• Emissions inspections exemptions• CAFE/ZEV credits• Cheaper to drive
Disincentivize EVs
• Increased registration fees• Increased use fees
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Conclusions, Future Work• Small (~1% by 2025) but growing
problem needs to be addressed• Finding the right solution is tricky
and politically difficult• Examine effects of alternative
revenue generation policies on total fleet funds
• Equity issues?
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AcknowledgmentsThanks to the Center for Climate and Energy Decision Making for funding and to my advisor Inês Azevedo