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The arguments are simple:
For those looking to maintain the state’s roads and bridges, it goes like this: Increasing the gas tax and placing a tax on electric vehicle owners is the best way to ensure that those who use them help care for them.
For those looking to reduce the use of carbon emissions and increase EVs, it goes like this: The tax effectively counters one of the main reasons to buy an EV — you don’t have to buy gas. This tax impacts the affordability of owning an EV.
In the end, it appears money won.
On Monday, the Legislature passed a bill to raise the gas tax (1.9 cents per gallon for each of next five years) and impose an annual $250 fee on EV drivers (which goes up $10 in each of the next four years).
EV groups were not happy.
New Jersey Coalition of Automotive Retailers President Jim Appleton said the EV fee is too high.
“No one disputes the notion that EV drivers must pay their fair share to maintain roads and bridges or that some form or some amount of user fee must be paid into the TTF by EV drivers,” he said. “Whether it’s $75 or $150 or $300, we must recognize that how much — and how — the fee is assessed will have a significant impact in the showroom and make it more difficult for consumers to afford an EV.
“Since New Jersey new car buyers pay four years’ worth of motor vehicle fees upfront, this supposed $250 fee isn’t just $250 at the point of purchase. It actually adds more than $1,000 to the purchase price of an EV in New Jersey.”
The new fee is going into effect at the same time the governor’s proposed budget does away with the EV sales tax exemption, the most effective and the only consistent EV incentive dealers have had to work with in the showroom, Appleton said.
“Clearly, the state’s aggressive EV mandates are on a collision course with our fiscal realities.”
The Governor’s Office has pushed back on this analysis. The administration said it is adding more incentives to its Charge EV program, up to $4,000 — which could offset taking away the sales exemption. It also said the $250 fee is based on $267 annual cost calculated by the Eastern Transportation Coalition that the owner of a gas-powered vehicle pays annually in federal and state fuel taxes.
The administration has set a goal of having all new cars be EVS by 2035 — a goal that starts with an aggressive goal of 51% by 2028.
Appleton’s not confident this math adds up.
“The governor’s proposed budget and the Transportation Trust Fund bill approved today take incentive money off the table and heap new upfront costs on EV buyers,” he said. “Consumers will not react well to this.
“Shrinking EV incentives and adding more than $1,000 to the upfront purchase price of a new EV will render the governor’s goal of 100% EV sales in New Jersey unachievable.”
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