NASHVILLE, Tenn. (WKRN) — The rise of electric and fuel-efficient cars could mean a bumpy drive for all Tennesseans.
According to a preliminary analysis from the Tennessee Advisory Commission on Intergovernmental Relations (TACIR), between 2024 and 2040, the state could see a $447.8 million dollar reduction in revenue due to the improved fuel economy of vehicles and inflation.
“Our collections are down at this point,” said TDOT Chief Financial Officer Joe Galbato during a budget hearing Wednesday, “We are actually down $4.5 million year over year.”
Galbato explained that while state and national bills have brought in money to improve infrastructure, a reduction in people driving and filling up their tanks, higher costs for goods and services, and the rise in electric and more fuel-efficient vehicles are all contributing to their financial hardships.
“It’s partially but a small portion of the function of electric vehicles, but we know it’s coming and that’s something we have to plan for,” explained Transportation Commissioner Butch Eley.
Eley and his team say over the next few years electric cars will be exponentially more popular in Tennessee.
According to TDOT, as of June 2022, there were 20,354 registered electric vehicles in Tennessee, and that number is expected to go up nine times by 2028 if similar trends hold.
In addition, if the Drive Electric Coalition of Tennessee reaches its goal of 200,000 EVs on the road by 2028, TDOT would lose an estimated $40 million in revenue that year.
“A 2022 report on Tennessee Public Infrastructure Needs prepared by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) shows $34 billion in needed statewide transportation infrastructure improvements,” wrote a TDOT spokesperson in an email to News 2. “For context, the Tennessee Department of Transportation’s annual budget for construction and maintenance is approximately $1.2 billion. We can’t afford any loss in funding.”
Less money on infrastructure would mean more frustration for drivers who describe Tennessee highways as “bumpy” and “congested.”
“They’re not as good as most places,” said road tripper Peter Quinn. “It looks like there are more bumps and an older system. Even in the middle of the day, it seems like rush hour.”
While a tax on gas is the main source of funding for TDOT, the increased cost of gas also hasn’t helped the department, according to commissioners who spoke at the budget hearing, considering the tax revenue they receive is allocated by the gallon rather than by the price.
“We have to find a viable solution to offset the funding loss,” a TDOT spokesperson explained.
Currently, the only cost the state receives from electric vehicles is the $100 vehicle registration, so to reverse this trend, the department is looking at what other states are doing.
In addition to increasing that registration cost, the state is exploring a Vehicle Miles Traveled (VMT) pilot program. This would tax drivers based on distance traveled, but some are concerned about the privacy implications and added cost of programs like this.