Ballot Proposal Triggers New Fees for Hybrid and Electric Cars

January 30, 2015

Ford_Focus_Electric_at_the_2012_Stockholm_Car_FestivalMichigan has presented a proposal that would affect hybrid and electric car owners. If voters approve the proposal in May, a separate law that would create an annual surcharge of $75 on electric cars and a surcharge of $25 for a majority of hybrid cars will be implemented. The role of the proposed new fees is distributing road maintenance costs to car owners who do not pay or pay little taxes on state gas. These taxes are the primary source of funding for infrastructure in Michigan. The senate majority leader says that hybrid and electric car owners are using state roads while not using any fuel. Therefore, the proposed charges are more like user fees.

The proposal has faced some criticisms with some critics pointing out that high registration fees are already being paid by hybrid and electric car owners. These fees are based on the cost of purchasing the vehicle and act as the source of road revenue for the state. Last year, the Ecology Center of Ann Arbor did some analysis and found out that over its lifetime, an electric car can generates more state revenue. However, some of the revenue in question is generated from the sales tax for the state, mostly directed toward cities and schools.

The cost of Ford’s 2012 Focus Electric car is nearly twice that of its gasoline-powered counterpart. This results in almost an extra $700 in tax on sales at the time of purchase. Up to $1,011 in state taxes could be saved by an electric car owner over a range of 165,000 miles within 11 years. The extra car registration fees that would be paid by such a driver within this period are about $842. According to Charles Griffith, a member of the Ecology Center, most of the electric car owners are fine with paying road taxes.

The National Conference of State Legislatures has reported that about five states: Nebraska, Colorado, Washington, Virginia, and North Carolina have agreed to the adoption of electric vehicle surcharges. Other states were still deliberating on the idea. Several states, as well as the central government are providing incentives that would encourage people to buy electric cars. These cars are inclusive of those manufactured by Detroit carmakers or that feature batteries made in Michigan.

The proposal in question was initially debated in June, 2013 in the House Transportation Committee and was greatly opposed by the auto industry. The proposal then re-emerged late last year with the inclusion of registration fees.


Filed under: Electric Cars,Green News and Products,hybrid cars,Press & Articles

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