The Road Ahead: Oregon Mandates Pay-Per-Mile Fees for Electric Vehicles, Following Hawaii's Lead

A seismic shift is underway in how states fund their vital road infrastructure. Oregon is poised to join Hawaii in implementing mandatory pay-per-mile fees for electric vehicles (EVs), addressing a growing challenge posed by the rise of fuel-efficient and electric cars: dwindling gas tax revenues.

For decades, the gas tax has been the primary engine funding road maintenance and construction.

However, as consumers increasingly embrace EVs and hybrids, which consume less or no gasoline, the revenue stream dedicated to these critical projects has begun to dry up. This impending fiscal shortfall has prompted states like Hawaii and Oregon to explore innovative solutions, shifting the burden from fuel consumption to actual road usage.

Hawaii is leading the charge, with its mandatory pay-per-mile system for light-duty electric vehicles set to commence on July 1, 2025.

The Aloha State has established a tiered fee structure: $50 for EVs under 10,000 pounds, $200 for those between 10,000 and 20,000 pounds, and a substantial $1,000 for vehicles exceeding 20,000 pounds. Alternatively, EV owners can opt for a per-mile charge, with the rate yet to be finalized. This proactive measure aims to ensure all drivers contribute fairly to the upkeep of the state's roadways, regardless of their vehicle's propulsion system.

Oregon, a long-time pioneer in road usage charges, is now taking a significant leap.

For the past decade, its OReGO program has offered a voluntary pay-per-mile option. However, a recently passed bill, HB 3409, is set to make participation mandatory for electric vehicles and certain hybrids beginning in 2027. This move signals a pivotal transition from voluntary participation to a widespread, obligatory system.

Under Oregon's OReGO program, drivers have the flexibility to choose between a per-mile charge or a flat fee, which currently stands at $200 for EVs and $100 for plug-in hybrids.

The per-mile rate is currently 3 cents per mile. Mileage is typically tracked through a small device installed in the vehicle or via a smartphone app. For plug-in hybrid owners, a credit is provided for the gas taxes they still pay at the pump, ensuring they are not double-taxed for their road usage.

While these initiatives are lauded by proponents as crucial for sustainable infrastructure funding, they are not without their complexities and controversies.

Privacy concerns regarding mileage tracking devices have been a consistent point of debate. Furthermore, equity issues have arisen, with critics arguing that per-mile fees could disproportionately impact rural drivers, who often travel greater distances, or lower-income individuals who may rely on older, less efficient vehicles.

The administrative burden of implementing and managing such programs on a large scale also presents a formidable challenge.

However, the trend is clear. Utah and Washington already have similar per-mile fees in place for EVs, and numerous other states are actively exploring analogous solutions.

Even at the federal level, the declining gas tax revenue is prompting discussions about national road usage charge programs. As the nation accelerates towards an electric vehicle future, the way we fund our roads is undergoing a fundamental transformation, ensuring that every mile driven contributes to the health and longevity of our transportation network.