MONTGOMERY, Ala. (WIAT) — Gov. Kay Ivey and other state leaders are welcoming the shift to electric vehicles in Alabama as a plus for the economy.
Lawmakers are grappling with how to make up for lost gas tax revenue if, and some say when, EVs become dominant on the roads.
Right now, Alabama collects about $1 billion a year in gas taxes which funds road projects. However, a widespread shift to electric vehicles could reduce that total by about $700 million, according to House Ways and Means Budget Committee Chairman Danny Garrett.
“How do we build roads in Alabama? And that’s a question as we consider this pending shift in consumer demand,” Garrett (R, Trussville) said.
It’s a shift Gov. Ivey says could be big for Alabama’s car manufacturing industry.
“We need to lean in on this new technology for the sake of our economy tomorrow,” Ivey said at the EV summit in Birmingham Thursday.
The state does charge an annual $200 electric vehicle fee, but Garrett estimates that would bring in only about $200 million a year if vehicles switched to electric. He says lawmakers have started talking about what to do if and when a shortfall happens.
“The shift is not imminent, so it’s not going to happen like right now. I think the discussions have begun and I think will continue in the next session,” Garrett said.
That shift could come sooner than later. Alabama Clean Fuels Coalition President Michael Staley says EV adoption is happening fast.
“We saw a 62% increase in the number of EV’s registered to drivers in the state last year. This year just in the first nine months of the year we’ve seen another doubling of those,” Staley said.
Staley says EVs shouldn’t be held wholly responsible for a dip in revenue.
“What we have is more increasing efficiency in all forms of transportation, including gas-burning vehicles, and as a result of that you have less gas tax revenue,” Staley said.
Another House Budget Committee Chairman Steve Clouse says he doesn’t think this is something Alabama needs to address right now.
“Not at this time, I don’t. Who knows what may happen 10 to 15 years down the road,” Clouse (R, Ozark) said.
Staley says even with EV drivers not paying a gas tax, the state still benefits a lot from out-of-state drivers who stop for a charge and spend money while they’re here.