Who Will Pay For Roads and Bridges If Electric Cars Get Market Share?

Good point:

U.S. roads and bridges are in abysmal shape – and that was before the recent winter storms made things even worse.

In fact, the government rates over one-quarter of all urban interstates as in fair or poor condition and one-third of U.S. bridges need repair.

To fix the potholes and crumbling roads, federal, state and local governments rely on fuel taxes, which raise more than US$80 billion a year and pay for around three-quarters of what the U.S. spends on building new roads and maintaining them.

I recently purchased an electric car, the Tesla Model 3. While swerving down a particularly rutted highway in New York, the economist in me began to wonder, what will happen to the roads as fewer and fewer cars run on gasoline? Who will pay to fix the streets?

Fuel taxes 101

Every time you go to the pump, each gallon of fuel you purchase puts money into a variety of pockets.

About half goes to the drillers that extract oil from the earth. Just under a quarter pays the refineries to turn crude into gasoline. And around 6 percent goes to distributors.

The rest, or typically about 20 percent of every gallon of gas, goes to various governments to maintain and enhance the U.S. transportation’s infrastructure.

Currently, the federal government charges 18.4 cents per gallon of gasoline, which provides 85 percent to 90 percent of the Highway Trust Fund that finances most federal spending on highways and mass transit.

Read more at: https://phys.org/news/2019-02-electric-cars-america-crumbling-roads.html#jCp

Netherlands: Electric car subsidies largely benefit ‘rich’ Tesla and Jaguar drivers

No surprise.

Around half the government fund to stimulate people to drive electric cars has ended up in the hands of ‘rich Tesla and Jaguar drivers’, the Volkskrant said on Wednesday.

Last year, the government said it would fund tax breaks totaling €700m for electric car drivers. But almost half the 25,000 electric cars bought in the Netherlands in 2018 were Teslas and Jaguars with a price tag of €80,000 to €120,000, the paper said. In particular, the sale of Teslas rose 260% last year.

The paper bases its claims on answers to MPs’ questions given by tax minister Menno Snel in parliament on Tuesday evening. This means that CDA leader Sybrand Buma’s comments that ‘prosecco-drinking Tesla drivers’ have profited from the tax break at the ‘expense of the ordinary man in the street’ are largely true, the paper said.

It points out that the subsidies for electric cars are mainly funded by higher taxes paid by petrol and diesel car owners.

The government had assumed 11,000 electric cars would be bought in 2018, with an average price of €43,000. Instead, 25,000 were bought for an average of €63,000 each. This, the paper says, means the subsidy scheme has overrun its budget by ‘a couple of hundred million euros’.

Read more at DutchNews.nl: