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Problem of decreasing fuel tax income not (yet) seen by most governments

While the introduction of electric vehicles may be slower than expected, it is obvious and already quite predictable that in many countries around the globe the vehicle fleet will primarily consist of electric vehicles in the long run. This transition will come with decreasing fuel tax incomes and therefore government budget shortfalls.


Only a handful of governments have taken measures to avoid running out of funding for road and other mobility infrastructure by introducing a milega-based fee stepwise replacing fuel tax. Some states in Australia have introduced a "ZLEV" (Zero & Low Emission Vehicle) tax and in the US first states have introduced a "milage-based usage fee" program for solving the problem of decreasing fuel tax income. Virginia just recently introduced such a program and is currently onboarding 2,000 new users each month (for further details see this Washington Post article).


It will be interesting to see how fast and when other governments will start to understand the problem and what their response will be then. In Germany for example the Federal Environmental Agency (Umweltbundesamt) predicts that income from fuel tax may fully vanish by 2040 (see chart below). Like in many other countries however, there are no initiatives planned to solve the problem. This is a pity as a milage-based mobility pricing programs like for example discussed in Switzerland would not just help to compensate for declining fuel tax income but also to use mobility pricing as a policy tool for steering the society towards a more sustainable mobility behavior.




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