When an electric vehicle glides silently past a gas station it is also rolling over a growing problem: underfunded roads. States are seeing gas tax revenues plummet due to EV and hybrid vehicle adoption, even as gas taxes continue to shoulder the cost of maintaining and expanding transportation infrastructure.
As EV adoption accelerates, more states may be facing an infrastructure crisis—more cars on the roads, fewer dollars to fix those roads. The irony is apparent. The cleaner our transportation future becomes, the harder it gets to pay for the infrastructure that make their use possible.
Crumbling Math of Gas Taxes
For a century, state gas taxes have been a quiet workhorse of American infrastructure funding—easy to administer, difficult to avoid, and more or less tied to actual road use. That logic breaks down when drivers start “fueling up” at home and skipping the pump entirely.
In 2016, gas taxes made up 41.1% of states’ transportation revenue—by 2024 that number was down to 35.9%. All indications are it will continue to fall, and in some states—like California—revenues may be cut by nearly two-thirds by 2035.
Meanwhile, the cost of building and repairing infrastructure is heading in the opposite direction. Inflation has jacked up the price of everything from asphalt and steel to labor. A stagnant federal gas tax, left unchanged since 1993, has only added to the crunch.
The math no longer works. States are bleeding revenue as the bill for safe and functional roads keeps growing.
The Demand for Chargers
The other side of the problem is, just as gas tax revenues are drying up, EV charging infrastructure is nowhere near ready to take over. Gas stations aren’t glamorous, but they’re ubiquitous. Fast and reliable EV chargers, in some parts of the country, are less easy to find.
This creates a fiscal bottleneck. States are being asked, or even outright demanded, to spring toward an electric future without the funds to build the basic infrastructure required. The stakes aren’t abstract or academic—inadequate public charging slows adoption, but doesn’t stop it outright, and disproportionately affects rural drivers. Gas taxes are hiked to account for a shriveling base, but not every region within a state is equally left in the same internal combustion past.
States are running both a fiscal and an infrastructure deficit. If they wait for private companies or federal grants to close the gap—they may be stuck in neutral for a long time.
Bond-Funded Solution with a Smarter Tax
So how do we fund the future? States can’t raise gas taxes forever—slowly fiscally strangling an ever-decreasing number of drivers with rising costs. Slashing infrastructure spending isn’t an option unless we’ve all decided to embrace potholes and crumbling bridges as a new normal.
States should instead consider issuing bonds specifically to fund a comprehensive buildout of public EV charging infrastructure. This needn’t be a pie-in-the-sky climate pitch but can instead sound in good fiscal strategy. Bonds are meant for long-term investment, and charging stations are just that.
Rather than just absorb the cost, states could repay those bonds through a per-kilowatt-hour tax on public charging through the network. Unlike the gas tax, which is really only loosely tied to road use, a kWh tax on charging stations almost exactly correlates with vehicle miles traveled—especially if tiered by charging speed.
Such a tax would be cleaner, fairer, and much harder to evade. EV drivers who charge at home or on private charging networks would avoid it—just as some gas users can avoid higher gas-tax jurisdictions by driving over the border to a neighboring county or state. Public chargers would serve as reliable collection points, and private chargers could be taxed on another basis—a simple tax on profits generated by the network.
EV drivers, who still do use the roads after all, would be contributing to the infrastructure they depend on, without bogging down the transition with complex odometer tracking or privacy-impinging GPS systems.
Why A kWh Tax Beats Alternatives
States, to their credit, have tried to patch the gas tax pothole. Some have hiked EV registration fees; others are experimenting with road usage charges based on yearly odometer readings or actually tracking miles driven automatically. These fixes range from regressive to Orwellian.
Charging a flat $200 annual EV fee means a suburban retiree who drives 3,000 miles per year pays the same as a rideshare driver logging 50,000. Mileage tracking may be more accurate, but it raises privacy concerns and may not reflect miles driven in-state.
A public kWh tax would avoid all of that: it is proportional, technologically simple, and transparent. Put simply, it is what road finance needs more of.
Tax What Is Used, Build What Is Needed
The road to an electric future is never going to be paved with gas taxes. If EVs are going to dominate the market, they both need a robust charging infrastructure and to help pay for the roads they drive on.
Bonding out the cost of a public charging network and recouping it through a per-kWh tax isn’t radical; it’s responsible and modernizes the way we fund infrastructure.
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