For years, electric vehicle owners have enjoyed something of a free pass. While drivers of gas guzzlers pump money into government coffers every time they fill up, EV owners glide past gas stations without contributing a penny to road maintenance. This arrangement was always going to be temporary, and now the bill is coming due.
The UK government is expected to announce a 3.8 cent per mile charge for electric vehicles starting in 2028, which would cost the average driver approximately $315 per year on top of existing road taxes. A handful of US states have already implemented pay-per-mile EV fees, and drivers aren’t happy.
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This Revenue Crisis Isn’t Just British
Fuel duty revenue in the UK has plummeted from nearly 7% of government income in 2019/2020 to just 2% by 2025-2026. In America, it’s a similar story. Gas tax revenue accounts for 35.9% of state transportation department revenue nationwide, and that foundation is crumbling.
California’s Mineta Transportation Institute predicts a 64% loss in fuel tax revenue between 2025 and 2040. West Virginia’s Department of Transportation projected fuel tax revenue could fall by as much as 52% from 2031 through 2050. These numbers represent billions of dollars that won’t be available for fixing potholes, maintaining bridges, or building new infrastructure.
How Distance-Based Taxation Actually Works
The UK’s proposed system would require drivers to estimate their annual mileage upfront and pay accordingly, with credits issued if they drive less than predicted and top-up charges if they exceed their estimate. This approach sidesteps the thornier issues of GPS tracking and real-time surveillance that make many drivers uncomfortable.
Several US states already operate pay-per-mile EV fees or flat-rate fees for EVs or hybrids, with Oregon charging drivers 2 cents per mile, Utah at 1.11 cents per mile, Virginia at 1.14 cents per mile, and Hawaii at 0.8 cents per mile.
We Should Have Seen This Coming
The writing has been on the wall for anyone paying attention. Governments structured their road funding around a declining revenue source, then actively encouraged people to abandon that source through EV incentives and mandates.
The question was never if electric vehicles would be taxed, but when and how much. What governments are trying to prevent is a future where nobody pays for roads at all. Whether American drivers will accept per-mile charges as readily as registration fees remains to be seen, but the alternatives are limited. After all, you can’t maintain highways with environmental consciousness.
