Electric Car Owners in Washington State to be Hit by $100 Fee

MONEYelectricity
MONEYelectricity

Despite the fact that many state governments across America have been very proactive in encouraging consumers to move to electric powered vehicles, it seems as though the authorities in Washington State have devised a new plan to increase their electric car related income. As of 1 February 2013, all electric car owners must pay an additional $100 fee with their annual vehicle registration renewal, something which has prompted a backlash from the green movement.

Why pay a $100 electric car tax?

The Washington State authorities have suggested the $100 annual fee will help with road improvements, as well as compensating for any tax losses on the gasoline which traditional fuel vehicle drivers would have acquired. The law will not apply to hybrid vehicles or those with speed restrictions under 35 mph and at this moment in time it is estimated that around 1600 vehicles will be forced to pay the additional "car tax" from next year.

Do you not pay tax on your electric?

A number of the more prominent vehicles in the electric car market such as the Nissan Leaf, Tesla Roadster, and an array of custom-made machines, will all come under the new taxation regime. Many electric car owners have stepped forward in anger to ask why they are being forced to pay an additional $100 in road tax when they already pay tax on the electric which is used to power their vehicles.

This is most certainly a valid question and to date and it is one which the authorities have not answered directly. There is growing concern that on one hand the authorities are encouraging drivers to switch to electric powered vehicles, often offering financial incentives, while on the other hand they are looking to create a long-term income stream from this new mode of transport.

Will this be replicated across the board?

While the Washington State government has been very vocal in its support for the new car tax, there are no immediate plans by any other U.S. authorities to introduce such an income stream. However, it does seem only a matter of time before even more U.S. state authorities joined the bandwagon and look to create long-term income streams which will help to balance any loss in gasoline taxes against an increase in electric car usage.

As we also approach D-Day for the so-called "fiscal cliff" budget talks in the U.S. there is no doubt that state authorities will be looking to increase their income as quickly, and by as much as possible. Whether or not they will be able to push through any more significant tax hikes with regards to electric vehicles remains to be seen because the less financially attractive they become the fewer consumers that will join the movement.

Conclusion

It seems rather bizarre for the Washington State authorities to on one hand be offering financial incentives to acquire electric vehicles, while on the other increasing the cost of keeping them on the road. It seems to be a very disjointed policy at this moment in time and suspicions, which many people have had for some time, that inevitably electric vehicles will become yet another income stream for governments around the world, are beginning to materialise.

So far there has been a significant backlash from the electric car community, although whether this will have any impact in the short to medium term remains to be seen. Is the cat now out of the bag?