New Tax ‘Only Way to Go’ for EVs, Former U.S. Transportation Secretary Says

DETROIT – Electric vehicles in the U.S. should be taxed on a miles-traveled basis to ensure sufficient funding exists to upgrade and maintain the nation’s infrastructure, former Transportation Secretary Norman Mineta says.

It’s “the only way to go,” Mineta tells WardsAuto here on the sidelines of the Detroit International Advanced Manufacturing Technology Show. “The question is, how?”

The U.S. Highway Trust Fund that finances road and bridge construction and repair projects is supported by taxes on gasoline, diesel, natural gas and propane. But EVs don’t use such fuel, which has inspired law makers in several states to consider a new levy on EV owners.

This has prompted backlash from alternative powertrain proponents who claim EVs and hybrids benefit the environment while, in keeping with the Obama Admin.’s vision of populating the nation’s roadways with 1 million electrified vehicles by 2015, promoting energy independence.

“(Opponents) think of it as being, ‘They keep trying to tax me more,’” Mineta says, adding government’s real intention is to ensure fairness. “Because electric vehicles still occupy space and have needs for roads and bridges.”

Citing the closure of a busy bridge that links Ohio and Kentucky, the state of the nation’s infrastructure poses a “critical threat” to the economies of the U.S., North America and the world, Mineta says in a speech. “Everything that we eat, drink, wear and consume got to the store by something on wheels.”

Because the U.S. is a key cog in the global marketplace, “we’re not just impacting our own productivity and our own congestion, but everyone else’s.”

Claiming Germany, Russia, India, China and Brazil have made infrastructure a top priority. Mineta warns the U.S., on its current course, “will be at a severe economic disadvantage.”

U.S. infrastructure condition “critical threat” to economy, says Norman Mineta.

Legislation to address the issue expired in 2009. Since then, status-quo funding has been extended eight times.

“I challenge our House and Senate leaders to continue to work toward a long-overdue solution,” says Mineta, who also raises the prospect of tapping private funding.

Against this backdrop, maintenance spending currently accounts for 87% of the Highway Trust Fund. And the remaining monies are not sufficient to finance all the necessary new construction, a disparity compounded by rising costs.

Among the most urgent problems, he suggests, is the bridge between Detroit and Windsor, ON, Canada. The Ambassador Bridge, which spans the Detroit River, accommodates some 25% of the total trade between the two countries – and much of that is automotive.

Ontario is home to 10 assembly plants that accounted for 2.1 million vehicles in 2010, according to WardsAuto data. Neighboring Michigan and nearby Ohio are home to a combined 21 plantsthat produced more than 2.6 million vehicles.

Total output from the three regions represented 39.4% of all North American production in 2010.

More than 80 years old, the “state of disrepair” of the Ambassador Bridge is “sadly symbolic” of the nationwide situation in the U.S., Mineta says.

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