The emergence of electric vehicles in the U.S. is on a fast track and so are pilot technology projects to automatically collect fees from EVs and gas-powered vehicles to pay for roads and bridges in coming decades.
At the same time President Biden wants half of all new passenger vehicle sales to be EVs by 2030, the $1 trillion infrastructure bill that recently passed the U.S. Senate calls for setting up a program to “test the feasibility of a road usage fee.”
In the future, EVs and gas-powered vehicle diagnostic units could instantly tabulate road usage fees and charge a credit card via a smartphone for automatic payment to Uncle Sam or another government entity.
The idea behind a national Road User Charge (RUC), also known as Vehicle Miles Traveled (VMT) payment system, is to collect billions of dollars in coming years from vehicle users to maintain the long-term solvency of the federal Highway Trust Fund, first created in 1986. That fund is primarily used for highway and bridge construction and maintenance as well as mass transit.
The Trust Fund now relies on a gas excise tax collected when gas is sold at the pump, but as more EVs emerge there will be less gas pumped and less tax collected since EVs will rely on charging stations or electric charging at a home or business. The need for an alternative to the gradually declining gas tax is a seemingly obvious reality, but one that transportation policymakers have been grappling with for at least the last decade.
“The U.S. will ultimately need to move to a VMT payment system,” said Robert Atkinson, president of Information Technology and Innovation Foundation, a Washington-based think tank. “It is an important accomplishment that the infrastructure bill includes measures to spur innovation, particularly by advancing a national VMT payment system.”
It is also important that trucks are included in the pilot, he said, and not only passenger vehicles. “Hopefully, the results of these pilots will lead to full-scale adoption of a national VMT system,” he said.
Years of study ahead
It will take years to get results from the pilots before Congress is likely to move ahead on a VMT payment approach. But first, the infrastructure bill needs to pass the House in the fall. Atkinson told Fierce Electronics that a “number” of House members on the Transportation and Infrastructure Committee support VMT pilots, but he added: “we can’t handicap the odds.”
Title III of the massive 2,702-page infrastructure bill, section 13001 on page 502, calls for “strategic innovation for revenue collection.”
Specifically, the bill calls for allocating $15 million each year from 2022 to 2026 ($75 million total) in grants divvied out by the Secretary of Transportation to rural and urban locations to test a variety of technologies for “collection of data and fees” on EVs and other vehicles. The tests must ensure privacy and security of data collected and would only be done with volunteer participants.
The bill offers a broad range of tools for collecting vehicle miles traveled: third party on-board diagnostic devices, smartphone applications, telemetric data collected by automakers, motor vehicle data obtained by car insurance companies and motor vehicle data obtained from fueling stations.
The bill also calls for the Treasury Secretary to establish per-mile user fees for motor vehicles, light trucks, medium- and heavy-duty trucks. The fees may vary between vehicle types and weight to reflect their estimated impacts on infrastructure, safety, congestion, the environment, and other social impacts. If the fees are collected by a third party, they must be transferred to the Trust Fund.
An advisory board is created in the bill to provide recommendations for developing and implementing the pilots. The secretaries of Transportation and Treasury will report yearly on progress in the pilot program that includes a statement of whether VMT fees “can maintain the long-term solvency of the Highway Trust Fund and improve and maintain the surface transportation system.”
In addition to the $75 million in grants, the bill provides $50 million over five years to carry out the pilot program.
Trucker opposition to VMT
In 2019, ITIF and Atkinson called on Congress to establish a VMT system, while addressing various concerns including from the trucking industry which has traditionally worried about VMT charges related to a vehicle’s weight.
“Their argument that a [VMT] system could lead to higher charges on trucks is valid, particularly because trucks now impose more costs on the system—particularly pavement damage—than they pay in taxes and fees,” Abramson wrote at the time. A VMT approach could be designed to make trucks pay by mile and by weight and the type of road they use, he noted.
The American Trucking Association has opposed a VMT payment approach going back to at least 2010 but its position on the infrastructure bill’s pilot program is not known. However, ATA recently praised the Senate passage of the infrastructure bill calling it a “groundbreaking step toward revitalizing America’s decaying roads and bridges.” The bill provides $110 billion for highways, bridges and roads.
With VMT payments, Abramson envisioned a technology platform to enable new services such as pay-as-you-go insurance, easy parking payments, congestion pricing and more private building of roads.
The Rand Corporation noted that onboard diagnostic units installed in vehicles since 1996 coupled with a GPS chip could be used to calculate and automatically transmit a payment from a driver’s credit card to the appropriate government entity.