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Jun 10, 2024
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State and local governments are looking for ways to reduce car trips and ease congestion in cities and charging drivers of EVs for their use of the roads.
New York City will soon implement congestion pricing—that is, fees to drive a car in lower Manhattan. The Metropolitan Transit Authority will soon begin charging cars $15 and motorcycles $7.50 to drive into the Congestion Relief Zone, which will be everything south of 60th Street in Manhattan. New York will begin charging people driving into the Congestion Relieve Zone on June 30, 2024.
Meanwhile, in California, the California Department of Transportation (known as Caltrans) is testing a pilot program that would tax drivers on the mileage they drive rather than on the gas they buy. This is to help recoup the revenue the state has been losing due to the increasing number of EVs on the road. With roughly 1.2 million EVs on its roads, the Golden State is experiencing a $200 million annual loss. Estimates suggest that could turn into a $4.4 billion shortfall over the next ten years.
According to Caltrans, the average California driver spends roughly $300 per year in state gas taxes, which are collected at the pump, which is why California has some of the highest gas prices in the country. By comparison, EV drivers pay just $100 per year in registration fees. The $200 million shortfall will only grow with time. California has seen a 1000 percent increase in the number of EVs on the road, and in 2023 one quarter of all new cars sold were EVs.
Cities are looking for increasingly creative ways to reduce congestion in high-density areas. Cities are also realizing that they will have to be more creative about how to tax road users so that they can reap the tax revenue necessary to keep roads maintained.
As more and more people replace their internal-combustion-engine (ICE) cars with EVs, governments will need to find ways to effectively tax EV drivers. There is an obvious solution for drivers who want to decrease how much they spend in order to drive: Ride an e-bike.
E-bikes cut a person’s transportation expenses by orders of magnitude. Not only is an e-bike’s purchase price 20 to 40 times less than most cars, there are very few costs associated with making an e-bike your daily driver. Depending on where you live, charging an e-bike costs between $0.40 and $0.60 and you can replace an e-bike’s tires and inner tubes for less than it costs to fill a gas tank. There are no registration fees, no licensing or insurance and because governments are trying to encourage people to park their ICE cars and find other modes of transportation, there is little chance that a city will ever concoct a scheme to charge e-bikes for their use of the roads.
Even if cutting your carbon footprint doesn’t enter into your plans, the money you save by making more of your trips by e-bike will make a difference in your monthly budget, leaving you more money at the end of each month.
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