In this spring’s state budget deliberations, the N.C. Senate considered raising fees on electric vehicles, or EVs, and introducing new ones on plug-in hybrids electric vehicles, or PHEVs. Owners of EVs currently pay a fee of $130 a year in addition to the annual vehicle registration fee. Under the Senate proposal, these fees would increase by $100 a year and PHEV owners would be charged almost as much as EV owners. The N.C. House has resisted the Senate’s plan. Since the budget negotiations with Gov. Roy Cooper are likely to be long and contentious, there is every chance the Senate will attempt to reintroduce these new fees. We should be vigilant and support the House’s opposition to the Senate’s proposals.
These fees are arbitrary, unfair and counterproductive. The reason for using EVs is both obvious and sensible: It reduces our dependence on inefficient, nonrenewable fossil fuel that is damaging to the environment and our health.
Proponents claim the fees offset lost gasoline tax revenue that is used to pay for road maintenance. There is, however, no metric to determine these lost taxes with any accuracy. The N.C. Energy Technology Center, which studied this problem, estimated in an April 2019 report that EVs now pay more than $300,000 in surplus fees beyond their actual cost in lost gasoline taxes (about $100 per EV). The higher proposed fees represent an even greater windfall for the state at the expense of EV drivers. As for PHEVs, the report’s authors conclude that “based on the data we received from the DMV, there is no easy way to identify plug-in electric hybrids or regular hybrids from other traditional vehicles.”
Twenty-one states have set different rates, the vast majority of which are lower than North Carolina’s. South Carolina charges a $120 biennial fee for EVs and $60 for hybrid vehicles; Virginia charges $64 annually for EVs and none for hybrids. Other states — a majority — have no fees.
In addition, EV owners, as some have argued, already pay taxes on the electrical usage needed to charge the batteries. The fees amount to a form of double-taxation.
More fundamentally, to collect fees on these vehicles discourages consumers from buying them. This runs counter to current and proposed state initiatives. The state passed a resolution in 2004 to replace 75% of its light-duty cars and trucks with alternative-fuel and low-emission vehicles. In October 2018, Cooper signed an executive order in support of zero-emission vehicles, or ZEVs, requiring the N.C. Transportation Department to plan for ZEV corridors, develop the ZEV infrastructure (such as charging stations) and “identify best practices for increasing ZEV adoption.” In this respect, Duke Energy has brought forward an initiative to build more public charging stations and reimburse residential customers for their own installations. Duke Energy’s proposal, proclaimed as the “Southeast’s largest utility EV initiative yet,” has been filed with the N.C. Utilities Commission. It should be greenlighted as quickly as possible.
The Senate EV/PHEV fees affect not only our environment but also our business climate. Business owners will be assessing these regressive ideas as they consider North Carolina as a place for new jobs and expansion. SAS, one of the most admired and profitable companies in our state, is increasing the number of free charging stations on its campuses as part of its pledge for social and environmental responsibility.
It said in its 2017 report:
“Minimizing energy consumption and related emissions from its operations is another SAS priority. The SAS Eco-Commuter Parking Program encourages employees to mitigate the environmental impacts of their daily commute by providing specially marked preferred parking spaces for plug-in electric vehicles (PEVs), low-emission vehicles and active carpool participants. ... SAS provides free charging for all employees and visitors at most of our office locations.”
Instead of imposing arbitrary, counterproductive fees, lawmakers should instead find ways to foster the adoption of these vehicles for the sake of our health and prosperity. Free the EV, so that we all can breathe more freely.