Electric Vehicles Facing New Threats in the Southeast

Under the gold dome in Georgia this year, legislators had the opportunity to consider new legislation to support electric vehicles (EV) and reduce the burden felt by both current and potential EV drivers in Georgia. HB 317 was introduced by Representative Todd Jones (R-South Forsyth) to reduce the “EV user fee” that was passed as part of the transportation bill (HB 170) in 2015. The EV user fee is a $200 fee (adjusted annually for inflation) that EV owners must pay annually with their vehicle’s tag registration. The goal of an “EV user fee” is to offset the loss of gas tax revenue (which provides funding for roads) as EV drivers don’t buy fuel, thus ensuring EV drivers help “pay their fair share” for using Georgia’s roads. While the majority of EV drivers agree that paying a fee makes sense, most feel it should be calculated based on miles traveled or in proportion to the size of the vehicle, or some other reasonable fact-based metric vs. an arbitrarily high penalty.

In 2015, when the fee was being considered, Georgia’s House Transportation Chair openly admitted that the math was fuzzy, yet here we are two years later with an EV fee of $204.20, twice what a Ford F-150 truck or large SUV would pay in gas taxes annually for driving the same number of miles, yet having less impact on the roads and emitting less pollution. HB 317 was not heard by the House Transportation Committee before “Crossover Day”, so it will not move forward, but SACE urges leaders to fix this punitive fee, give it a fair hearing and prioritize this change next sessionLet your elected officials know NOW that you want the fee lowered — you may submit comments to the Governor here, the Lt. Governor here or find more information on our Take Action page.

SACE has been meeting with legislators to share data on why the fee should be lowered. Many legislators have expressed support for lowering the fee and admitted that the fee is unreasonably high, but their hands have been tied by a “directive” that provisions of the transportation bill should not be touched. We think this is bad for Georgians.

The current user fee is an unjustified penalty to EV drivers and makes EVs the highest taxed vehicle in the state. EVs are cheaper to fuel than gas-powered vehicles, and increasing the use of EVs can keep more money IN Georgia. This money spent on electricity goes to power companies that employ Georgians, pay local taxes, and have a stake in the state economy. Electricity prices are also far more stable than gasoline prices too, allowing drivers to avoid the risk of future price spikes. In contrast, a majority of the money drivers spend to fill up conventional vehicles pays for crude oil, which is extracted outside Georgia.

Georgia’s EV tax credit was also eliminated in 2015, providing another blow to Georgia’s innovation leadership. Since that time, there has been more than a 90% drop in EV sales. We went from leader to laggard in a matter of months. The costs of EVs remains higher than conventional vehicles on the road and, as with many new technologies, tax incentives and policies are highly effective and important drivers for growing new markets.

New EV Struggles Grow Across the Southeast 

Unfortunately, Georgia is no longer alone in this fight, as unfriendly EV legislation is popping up all over the country. In the Southeast, there are at least two other states facing the threat of a new user fee for EVs. We think these proposals are bad for business and the environment.  In South Carolina, a biennial fee of $120 has been proposed and, in Tennessee, the Governor has included a new EV user fee as part of his tax plan.

Until EVs gain notable penetration of vehicles on the roads in our states, this cleaner, more efficient technology should not be penalized with additional fees. As it stands today, EVs make up less than 1% of state vehicle registrations across the region. To encourage quicker adoption of these clean vehicles, EVs should only be required to pay registration fees and/or taxes AFTER there are a certain threshold of EVs on the road (5-10% at a minimum). SACE is also advocating for state tax credits and rebates for EVs and/or other purchased incentives, such as sales tax exemptions or a Title Ad Valorem Tax exemptions for EVs. In Georgia, we also encourage the clarification of the tax credit for charging infrastructure and continuation of the vehicle tax credit for larger vehicles (trucks & buses), which is being considered in HB 421. Unfortunately, this bill has also stalled for this year.

State legislators need to step back and take a look at other ways to make up for their losses of gas tax revenue, seize the opportunity to become leaders in EVs, and not penalize innovation.

 

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