It is no secret that if voters repeal the gas tax, an estimated five billion dollars will be stripped away from infrastructure spending. That is money that would be allocated towards repairing potholes on highways and crumbling bridges across the state. Often overlooked in this policy discussion, however, is how repealing the gas tax would affect California’s Plug-in Electric Vehicle (PEV) market.
There are two factors that can effect the cost of gasoline: market fluctuation and taxes levied on gas. In the case of the former, the cost per barrel of oil is outside the control of Californian legislators (though the federal government does its best to do so). This leaves taxes as the sole policy tool to affect gas prices.
This is important because during extended periods of high gas prices, consumers tend to change their driving habits (think summer 2008 gas prices). In this way, higher gas prices today will encourage consumers to look towards PEVs tomorrow. Though incentivizing consumers to switch to PEVs was not the main goal of Senate Bill I, increases in taxes collected on a gallon of gas should nonetheless affect purchasing patterns. Repealing this tax, as being considered during the November 6th election, would weaken a strong incentive for PEV adoption.
The state aims to have five million PEVs on the road by 2030, drastically lowering its carbon footprint associated with transportation. Consequently, this will help ensure targets set out in SB-100 are achieved (transportation currently accounts for 40 percent of greenhouse gas emissions in the state). In this way, the gas tax acts as a promoter of the PEV industry and the obtainment of 100 percent clean energy.