Rise in Electric Vehicle May Be Denting Florida’s Gas Tax Revenue

As more motorists drive electric vehicles, the change could put a dent in gasoline taxes, which play a key role in funding transportation projects in Florida, according to an analysis by state economists.

The analysis, compiled by the state Revenue Estimating Conference, said the “market share of electric vehicles in Florida is expected to increase significantly over the course of the next 10 years” and pointed to factors such as more-affordable purchase prices, increased access to charging stations and extended battery life.




“As owners increasingly turn to electric vehicles, gas tax collections will face continuing downward pressure and, in so doing, reduce the state’s primary funding stream for transportation,” an accompanying summary said. Florida collects about 25 cents a gallon in gas taxes. Economists look at what is known as “fleet miles per gallon” in forecasting fuel and tax numbers.

The analysis noted that electric vehicles remain a “relatively small” portion of overall fleets of vehicles in Florida and the U.S. “While electric vehicle impact on new vehicle fuel economy is imminent, there will be a delay of at least five to seven years before this impact can be observed in the overall fleet as the universe of vehicles on the road converts from gas-powered to electric,” the analysis said.

“This process will take many years to complete as gas powered vehicles currently on the road have a reasonable expectation to continue use for at least 10 to 15 years. Also note that there are other factors which influence fuel economy, such as improved fuel efficiency of gas-powered vehicles and the mix between light and heavy vehicles.”

–News Service of Florida