Op Ed: Legislature Needs Basic Knowledge of Electric Vehicles Before Regulating Them

Change is not easy, and the adoption of electric transportation presents us with complex social, economic, and technical issues. The Montana Legislature passed punitive and discriminatory bills to tax electric vehicles (EVs). But what’s most concerning is that these are some of the most amended, unamended, and re-amended bills in the entire session. It seems that legislators still don’t know much about EVs, yet they’re pushing taxes and regulation through anyway.

Adoption of EVs continues to rapidly increase in Montana, but it’s clear that more education is needed about how these vehicles work before we begin regulating them.

The Governor has already signed legislation creating a $130 annual registration fee for EVs in addition to the registration fee we all pay. This new fee will go to pave our roads the same as gas tax funds do. However, my yearly driving average for my EV over the last five years is 8,000 miles a year, all on Montana roads. Most Montanans average between 12,000-15,000 miles per year. This calculates out to about 2,000 kilowatt-hours (kWh) of electric fuel, which is equivalent to about 59 gallons of gasoline. With the current gas tax of $0.3275/gallon, I would have to drive my EV 52,000 miles a year to reach the HB 60 fee of $130.

In addition, a fundamental feature of EVs is regenerative braking. The electric motor mode puts the car in motion, and the regeneration mode slows or stops the car. Regenerated energy charges the battery, returning an estimated 10-15% of the energy used to slow the car. Think of it like putting gas into your car as you’re braking. This concept is unfamiliar to gasoline-centric regulation and should be factored into taxation on EVs.

However, the big story is HB 55. According to testimony, the major reason for HB 55 is to capture EV road use by out-of-state users by taxing electric fuel obtained at charging stations. These out-of-state EV drivers do not have to pay the new annual EV registration fee of $130 and taxing EV road damage of non-residents is a major problem that has not yet been solved on a national basis. At the present time, out-of-state EV traffic from state to state is minimal but growing. The same can be said of Montana EV drivers who will also use public charging as they travel across our state.

The major cause for concern was that placing metering on all possible public charging circuits would require an enormous outlay of money and time. The fiscal note for HB 55 originally stated it would cost over $2 million dollars to implement taxing on public fast chargers. Instead of creating a new system for the State to collect these taxes, the Legislature amended the bill to put that burden on Montana businesses and electric utilities by making businesses spend more money for new meters on top of the charging stations they’ve already invested in. Utilities will monitor those meters and collect the new tax. Before sending the tax funds to the State, utilities can keep a portion of the tax for “administrative” overhead.

HB 55 serves as an uneconomical method of taxing. It has the possibility of hurting Montana tourism, double-taxing residents, and incurring large expenses for electric utilities and businesses to implement.

The Governor should veto the ill-conceived HB 55 and instead encourage the Legislature to form a task force of Montana stakeholders with a mandate to design an equitable and non-discriminatory vehicle taxation bill to bring to the 2025 legislature.

Nick Shrauger is a retired associate professor of the MSU Electrical Engineering Department and has driven electric vehicles since 2010.