State Policy Briefs: The Effect of Zero-Emission Vehicle Policies on Dedicated Highway Infrastructure Funding

In a series of state policy briefs, Kevin W. Christensen, Andreas Groehn, and Bill Hamm estimate the loss in federal and state fuel excise taxes that will occur upon a state’s adoption of a zero-emission vehicle (ZEV) policy that phases out the sale of internal combustion vehicles. California was the first state to adopt a ZEV policy, and other states have adopted or considered adopting similar ZEV policies.

Construction and maintenance of transportation infrastructure in the United States is funded primarily with revenues derived from federal and state excise taxes on gasoline and diesel fuel. When ZEVs replace vehicles with internal combustion engines, the demand for gasoline—and, hence, federal and state fuel tax revenues—goes away. Thus, the adoption of ZEV policies likely will have a profound impact on transportation infrastructure, jobs, and personal income.

View the state policy briefs: