Get ready for an EV road tax

May make EV's uneconomical for many

Javier Blas recent Bloomberg article pointed out that European and U.K. governments received almost US$200 billion in revenue from gasoline and diesel taxes imposed at the pump. European countries collected another 450 billion Euros from taxes and royalties on upstread oil & gas production. There are about 250 million vehicles on the roads in Europe.

Somewhere around 30% of oil is used in transportation. If the so-called “green” plans of European countries result in an all-electric fleet, the unintended consequences include a revenue penalty of some US$350 billion, more or less. Directly or indirectly, drivers pay this tax but it is hidden in the pump price of petrol and in the royalties and taxes imposed on the oil producers, so EV drivers merrily drive on believing they are saving money in addition to “saving the planet” by buying an EV comparing what they pay for subsidized electricity when they charge their EV battery to what they would pay for fuel for an ICE vehicle.

Reality will have to set in. Heavier EV’s do more road damage and roads must be maintained. The reduction in oil usage will cut government revenue by the taxes and royalties on the oil use avoided and the taxes imposed on drivers at the gas pump will disappear. This revenue will have to be replaced and the logical place to get it is from the same drivers who are actually paying for it now. An EV tax will either be added to the cost of electricity at the charging station or home, or imposed on a per vehicle basis, but the approximately US$1,400 per vehicle will have to come from somewhere.

Typical drivers drive about 15,000 km per year on average, so the additional tax (wherever imposed) will come up to over 9 cents per kilometer driven. Oops! The expected “savings” from EV adoption just went out the window and the cost of operating a car will be higher with an EV than an ICE vehicle without bothering to consider the higher price for the battery powered EV and the eventual cost of battery replacement.

The EV “revolution” may be the darling of leftist politicians today but over time voters may revolt when the outcome is a higher cost of living and the nonsensical attempts to change the weather by suppressing CO2 emissions fall into the category of stupid ideas that had no merit since CO2 is harmless, does not cause climate change, and claims to the contrary are leftist tripe.

EV’s will become competitive alternatives to ICE vehicles at all price points over time, but that in no way means everyone will choose an EV. Road taxes, higher costs of electricity as energy costs inevitably rise (and rise faster for unreliable renewables than for fossil fuels (which will be with us for centuries to come), higher costs for battery metals in short supply, and the relatively poor access to charging stations in remote locations in Northern Canada, rural areas with larger distances for daily travel, and the need to use vehicles to carry loads (trailers, cargo, mobile homes, construction materials) that are bulky, heavy and difficult to manage with EV’s will require diesel powered transports and ICE powered SUV’s and pickups will be the vehicle of choice for many drivers for a long long time. I like the Ford Lightning for its clever design and flexibility would never own one. Too expensive. too little range (I drive from Colingwood to the Ottawa area now and then and that would take forever with that vehicle) and a bit too vulnerable to winter weather for my liking.

Nothwithstanding, EV’s will grow in popularity and roads will need to be maintained and a “road tax” on EV’s seems inevitable unless EV’s are taxed like homes (e.g. an annual tax based on assessed value) to pay for the excess damage they will do to roadways.