As electric cars gain ground, a long-postponed question is now confronting governments: how can road maintenance be financed when fuel taxes disappear? Tried or planned in the UK, California, Switzerland and New Zealand, the kilometre-based tax applied to electric vehicles is emerging as a pragmatic solution. It’s an explosive subject, but one that is becoming less and less avoidable, and one that is beginning to enter the French and European debate.
The transition to electric vehicles is overturning a long-standing pillar of public finance. For decades, maintenance of the road network has been largely based on the taxes levied on petrol and diesel. The more motorists drove, the more fuel they consumed, the more they indirectly contributed to the infrastructure. With the electric car, this link disappears almost completely.
Each electric vehicle on the road represents several hundred euros less tax revenue each year. As long as electric cars remain in the minority, the effect will be limited. But with the gradual fall in sales of combustion engines and the challenges of the 2035 deadline being constantly reshuffled and rediscussed, the problem is becoming structural and forcing governments to review their strategy.
Fragile taxation and pilot countries
Faced with this programmed erosion of revenue, governments are looking for a new tax base capable of replacing fuel taxes without jeopardising the energy transition. Charging for the actual use of the road rather than the energy consumed seems an attractive direction. The principle is simple on paper: each vehicle would contribute in proportion to the number of kilometres travelled, regardless of its engine. For electric cars, the amounts quoted are generally around 2 to 4 euro cents per kilometre, giving an estimated annual contribution of between 240 and 300 euros for an average driver travelling 12,000 to 15,000 kilometres.
The British government plans to introduce an « Electric Vehicle Excise Duty » from 2028, with a per-kilometre tax rate around half that currently applied to internal combustion vehicles via fuel. The aim is to maintain revenues without brutally penalising electric vehicles. In California, the logic is even more assertive. The state is testing pilot projects for charging per kilometre for electric cars in order to make up for a colossal shortfall in revenue. Nearly 80% of California’s road maintenance budget is based on petrol tax.
A growing debate in France and Europe
In France, no specific kilometre-based tax for electric cars has yet been officially agreed. However, there are a number of signs that some thought is already being given to the matter, notably the plan to tax the heaviest electric vehicles from 2026. At European level, the issue is becoming unavoidable. The target of ending sales of new combustion-powered vehicles by 2035 is forcing Member States to plan ahead for a new road-financing model. Among the scenarios studied, kilometre-based taxation appears to be the most credible option for decoupling taxation and motorisation in the long term.
Other countries have made more discreet progress. Switzerland, Iceland and New Zealand have already introduced or experimented with kilometre-based charges or specific taxation for electric vehicles. The central argument is neutrality: electrification must not create a hole in infrastructure funding. In these countries, the kilometre-based tax is presented not as a sanction against electric vehicles, but as the gradual end of a tax exception deemed temporary. It is expected to become part of a contributory framework comparable to that for other uses of the road.
Technical details and a political equation
There remains the question of implementation. The simplest solution would be to record the mileage at the roadworthiness test and then charge for the distance travelled since the previous reading. But this approach would probably mean increasing the frequency of checks, at the risk of reinforcing the rejection of motorists. Technological solutions, such as the installation of on-board telematics boxes, offer more accurate measurement, but raise serious concerns. Data protection, respect for privacy and the monitoring of drivers’ movements are becoming major points of contention.
For governments, the argument remains to guarantee stable, long-term funding for road infrastructure and to ensure that all vehicles contribute to wear and tear on the network. For users, the risk is clear: an ill-calibrated kilometre tax could undermine the economic advantage of electric cars, which are already more expensive to buy, and heavily penalise heavy drivers. More than a question of principle, the kilometre tax now appears to be a question of timing, acceptability and dosage.
Sources: www.capital.fr – Reuters
