1657580 - Electric Vehicle (EV) Fee Structures: Best Practices, Alternatives, and Case Study Evaluation

Electric Vehicles (EVs) offer significant benefits not only to road vehicle owners (through lower vehicle operating and maintenance costs and performance enhancement) but also to the broader society, through increased sustainability, health, air quality, climate change and energy security. The Infrastructure Investment and Jobs Act (IIJA) has spurred states to expedite their efforts in electrifying road transportation through NEVI formula funding, by establishment of charging stations along the interstates enabling long distance travel. One crucial aspect of this planning involves establishing fair and effective fee structures (taxes) and fee levels associated with the widespread adoption of EVs. This research addresses the need for equitable EV charging fee structures to compensate for lost revenue from motor fuel taxes. It examines the alternative approaches for fees or taxes to be collected for EV usage or charging, such as annual fee, pay-as-you-charge fee, VMT fee, battery-weight fee and other fee collection methods that have been adopted in various US states or international contexts.

The study comprehensively analyzes the mechanisms adopted in different states to develop EV fee structures and provides recommendations for their successful implementation, highlighting best practices. Leveraging data from Indiana, the study proposes prospective fees and assesses their ability to recover revenue while ensuring fairness across different user groups, including various vehicle classes, and considers different levels of EV market penetration. The study has also developed an easy-to-use and interactive spreadsheet tool for computing revenues from EV fees and for quickly visualizing the impact of different EV fee approaches and fee structures on EV-fee revenues.