Posted on 04/09/2024 7:49:07 AM PDT by Red Badger
The new "EV Tax" is the highest in the nation and will likely put the brakes on EV adoption in the Garden State.
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With the stroke of a pen, New Jersey Governor Phil Murphy has unplugged the state's pro-electric-vehicle position, signing into law a new EV road tax that is the highest of its kind in the nation.
Starting in July, New Jersey EV owners must pay an annual $250 road tax fee in an effort to offset the state's loss in fuel tax revenue. The new fee will increase by $10 each of the next four years until it reaches $290 in 2028. To make matters worse, New Jersey requires buyers and leases of all new vehicles to pay four years of registration fees upfront and the new EV fee will be included in that initial payment.
Therefore, beginning in July, any new electric vehicle purchased or leased in New Jersey will cost $1,060 more than it does today. That's considerably damaging since the higher initial cost of an electric vehicle is one of the biggest impediments to EV adoption.
As a lifelong resident of New Jersey as well as a long-time EV owner, it pains me to see the state initiate what I consider an unreasonable tax on clean-energy vehicles so prematurely.
I say prematurely because I have always maintained that electric vehicles should pay their fair share of road taxes, which help fund the state's infrastructure repair and development. However, I believe that should only start once electric vehicles have reached a point of being 5% of the total light vehicle fleet in the state. Estimates have that figure currently at about 1.8%.
Additionally, once such a fee was imposed, I would support the amount to be similar to what the average combustion vehicle in its class pays per year through the state's gasoline tax. Murphy's current law will have many EV owners paying twice as much as the owners of a comparable combustion vehicle pay in the gasoline tax.
And the pain doesn't stop there. Since 2004, battery electric vehicles (BEVs) have enjoyed a sales tax exemption in New Jersey, and that luxury will now begin a three-year phase-out period. The sales tax exemption has been an enormous incentive to Garden State residents wanting to ditch the pump, helping to close the gap between the cost of a comparable combustion vehicle and the more expensive EV.
I understand the sales tax exemption wouldn't—or shouldn't go on forever. I figured that by the end of this decade EVs would have near cost-parity with combustion vehicles and the incentives wouldn't be needed anymore. However, today, and for the next few years, the incentives are still important in helping many that want an EV, afford it. The fact that the sales tax announcement was made at the same time the new EV road tax was signed into law made the news for New Jerseyians even harder to swallow.
I would also be remiss if I didn't mention the state's ChargeUp EV incentive program, which offers up to a $4,000 point of sale incentive on electric vehicles. Signed into law in 2020, ChargeUp is funded by the Board of Public Utilities which has $30 million set aside every year for 10 years to pay for the rebates. Each year since its inception, the fund runs out well before the year does, and the program gets suspended until the following year's funding is in place.
While the program's intentions were great, the way it has been administered has made it very difficult for dealers and EV buyers, because there are many months of the year when there is no rebate and no clear date when the program will receive its next traunch of funding.
I think that what's disappointed me most is that with the recent changes the state is going from one of the best states to buy an EV, to one where, over time, it will cost more to own one.
As a lifelong resident of New Jersey as well as a long-time EV owner, it pains me to see the state initiate what I consider an unreasonable tax on clean-energy vehicles so prematurely.
I say prematurely because I have always maintained that electric vehicles should pay their fair share of road taxes, which help fund the state's infrastructure repair and development. However, I believe that should only start once electric vehicles have reached a point of being 5% of the total light vehicle fleet in the state. Estimates have that figure currently at about 1.8%.
Additionally, once such a fee was imposed, I would support the amount to be similar to what the average combustion vehicle in its class pays per year through the state's gasoline tax. Murphy's current law will have many EV owners paying twice as much as the owners of a comparable combustion vehicle pay in the gasoline tax.
And the pain doesn't stop there. Since 2004, battery electric vehicles (BEVs) have enjoyed a sales tax exemption in New Jersey, and that luxury will now begin a three-year phase-out period. The sales tax exemption has been an enormous incentive to Garden State residents wanting to ditch the pump, helping to close the gap between the cost of a comparable combustion vehicle and the more expensive EV.
I understand the sales tax exemption wouldn't—or shouldn't go on forever. I figured that by the end of this decade EVs would have near cost-parity with combustion vehicles and the incentives wouldn't be needed anymore. However, today, and for the next few years, the incentives are still important in helping many that want an EV, afford it. The fact that the sales tax announcement was made at the same time the new EV road tax was signed into law made the news for New Jerseyians even harder to swallow.
I would also be remiss if I didn't mention the state's ChargeUp EV incentive program, which offers up to a $4,000 point of sale incentive on electric vehicles. Signed into law in 2020, ChargeUp is funded by the Board of Public Utilities which has $30 million set aside every year for 10 years to pay for the rebates. Each year since its inception, the fund runs out well before the year does, and the program gets suspended until the following year's funding is in place.
While the program's intentions were great, the way it has been administered has made it very difficult for dealers and EV buyers, because there are many months of the year when there is no rebate and no clear date when the program will receive its next traunch of funding.
I think that what's disappointed me most is that with the recent changes the state is going from one of the best states to buy an EV, to one where, over time, it will cost more to own one.
I'm certainly not the only person who shares these opinions. I reached out to Pam Frank, the CEO of ChargEVC, a non-profit coalition that promotes the sustainable growth of the electric vehicle market in New Jersey for her thoughts on the recent developments.
Frank sent me a copy of a letter the organization sent to members of the New Jersey Senate Budget and Appropriations Committee a few weeks ago along with a request to amend the new EV tax, and hopefully lower the annual fee to something more reasonable.
Below is an excerpt from the letter:
There are three main reasons supporting this position: First and foremost, it is imperative that we keep our eye on the ball. New Jersey has set aggressive statewide clean energy and EV adoption goals to combat the emissions that harm our environment and harm people’s health. The Murphy Administration and the New Jersey Legislature have prioritized efforts to reduce greenhouse gas emissions and fight climate change.
This has included implementing a range of incentives to support the purchase of EVs and the charging infrastructure necessary to charge these vehicles. Imposing an EV fee of $250 would negate the impact of these rebates and tax credits. It would also slow progress towards achieving our statewide goals. In fact, a 2020 nationwide survey of current EV owners by UC Davis concluded that a $100 annual registration fee on EVs would reduce sales by over 10%.
At $250, New Jersey would have the highest, most punitive EV fee in the country. We must ensure that New Jersey remains a national leader in the fight against climate change.
Don’t forget more expensive for insurance.
Recall that the development of nuclear energy was hamstrung by what to do with nuclear waste. I think EV manufacturing should be curtailed until there’s plan to handle the disposal of the giant EV batteries.
Statists gotta state.
(I'm not anti EV at all. Interesting tech, just with its own peculiar plusses and minuses. And won't do what the innumerate true believers in "Climate Change!(R)" think it will.)
“more expensive for insurance”
When your ev spontaneously combusts in your garage and burns your house down who do you call first, your homeowners insurance company or your auto owners?
We will pave the roads using recycled EV tires. They eat them up, so plenty of supply. (Don’t ask what tires are made from.)
They can be recycled. It’s not cheap, nor environmentally friendly. But it can be done.
Solid state batteries won’t need recycling nearly as often................
Saw this coming a mile away!
Also, this being New Jersey, do they require someone to plug in your EV as well?
It’s not that they hate EV’s, it’s that they LOVE taxes....
The masses have been made so devoid of the ability to think that they will grumble, and vote Dem anyway.
Also check the fees on EVs and Hybrids’ license plates.
This tax is actually a good one. Roads and bridges need constant repairs and that is what the gasoline taxes support. Theses EV drivers have to pay for that as well, it’s just done all at once instead of a gallon at a time............... 😎
Get woke, go broke!
Like others have said, roads require funding to be maintained. The funding source traditionally is based on who uses the roads and thereby the fuel tax was created. EVs are heavier than equivalent cars and wear roads more. EVs should be charged more than the equivalent gasoline / diesel powered vehicle if the principle of taxing based on usage.
if the world cannot procure roadway materials it’s their own asphalt. “Soylent Green! it’s the new asphalt replacement...and ITS GREEN”.
Their ‘Free Ride’ is OVER, it’s time to pay the fiddler...............
Kinda mushy after about a week, though..................
I understand, and I get it. You see, I live in New York State. We have gasoline taxes, and tolls, and mileage use taxes, and vehicle registration fees - and you can still lose the fillings in your teeth driving on our roads. Sure you need taxes to maintain your roads, but the people in charge are such poor managers of the taxpayer’s money, that they will squander it on non-transportation pet projects, and then when the roads and bridges are practically crumbling away, they will float a bond issue to ‘fix them’. So yes, tax the EV’s, but I just am skeptical of new taxes wherever they arise.
All that virtue shouldn’t come for free. And no, I don’t feel your pain.
EVs use the road, too. Pay up.
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