House Bill 188, the law to greatly increase registration fees on electric vehicles (EVs), isn’t fair to elderly people, like my wife and I, who drive just 5,500 miles/ year. We are planning to buy an EV-SUV to replace our current internal combustion IC-SUV, our only vehicle. Our current registration fee is $257/year and we pay $135/year in excise taxes at $.554/gallon of gasoline. So, our annual total is $392. Under HB 188 we would pay $592 for registration on the new EV-SUV, an extra $200/year. If we kept our IC-SUV, we could drive 12,100 miles/year, given our 20 miles per gallon [MPG] rate, before our total tax paid reached $592. So, HB 188 isn’t fair to us.
In purchasing our EV-SUV, we assume a one-time tax credit of $3,000, depreciated over five years, or $600/year. We also assume the purchase price, insurance, maintenance and depreciation will be the same for the EV-SUV as an IC-SUV. We would also save $590/year on energy purchases, going from spending $748 on gasoline at $2.72/gallon; to $158 for electric charging, based on an EV Miles Per kiloWatt-hour (MPkWh) rate of 4 MPkWh, at a NorthWestern Energy billing rate of 11.6 cents/kWh. Taking all this into account, we can reduce our vehicle costs by $983/year ($600 plus $583 minus $200) with the EV-SUV purchase.
Clearly the race by all the major auto manufactures to lower EV prices and capture the global market, will create tremendous demand. And EV’s produce much less air pollution.
Also, HB 188 doesn’t address deteriorating highway infrastructure due to less tax revenue per mile driven. Montana’s tourism industry will need a network of EV charging stations. President Biden plans to add 500,000 such stations by 2024.
Completely redoing the taxing structure that supports highway infrastructure is a big-picture major opportunity for bipartisan cooperation.
John A. Noreika
Bozeman Daily Chronicle Letter to the Editor 5/7/21