Did you know that every EV in California creates a $215 annual funding gap?
California’s move to EVs is creating a massive infrastructure deficit. See the side-by-side math of how every electric vehicle leaves a $215 annual gap in the state's road repair fund.
For a century, the gasoline excise tax has served as a direct "user fee" for California’s roads. However, the rapid adoption of electric vehicles—which reached a cumulative 2.5 million sales by the end of 2025—has broken the mathematical link between driving a mile and paying for the maintenance of that mile.
To understand California's headline-grabbing "mileage tax" proposal (which has not, in fact, actually been proposed), it's necessary to look at the specific dollar-for-dollar deficit created by the current tax structure, even as market conditions shift.
Sources & References
- California Energy Commission (Jan 20, 2026): "California Surpasses 2.5 Million ZEV Sales" – Sources the 18.9% Q4 sales rate, the 2.5 million cumulative milestone, and the impact of expired federal incentives.
- Caltrans / Build.ca.gov: "SB 1 Gas Tax Calculator" – Sources the $0.579 tax rate, the 1,200 miles/month average, and the TIF fee ranges.
- Mineta Transportation Institute: "How Will California’s Electric Vehicle Policy Impact State-Generated Transportation Revenues?" – Sources the $333.50 vs $118.00 comparison and the 2026-adjusted tax math.
- Alan Jenn / UC Davis: "California’s Electric Opportunity for a Road User Charge" – Sources the origin and purpose of the $118 Road Improvement Fee.
The $0.579 Benchmark
As of 2026, California’s state gasoline tax is $0.579 per gallon. This revenue is strictly sequestered for road maintenance. When a driver of a standard internal combustion engine (ICE) vehicle travels the California average of 1,200 miles per month in a car achieving 25 miles per gallon, they purchase 48 gallons of fuel.
That single driver contributes $27.79 per month directly to road maintenance via the gas tax, per a 2024 Mineta Transportation Institute report.Over a year, that total reaches $333.50.
Mac Douglass | Editor
The ZEV Registration Shortfall
In 2017, the state introduced the Road Improvement Fee (RIF) to ensure zero-emission vehicles (ZEVs) contributed to the fund. This is a flat annual registration fee of $118 for ZEVs.
While this fee was intended to ensure ZEV owners "pay their share," the side-by-side comparison reveals a significant revenue disparity:
| Annual Contribution Type | ICE Vehicle (25 MPG) | Electric Vehicle (ZEV) | The Revenue Gap |
|---|---|---|---|
| State Gasoline Tax | $333.50 | $0.00 | -$333.50 |
| Road Improvement Fee | $0.00 | $118.00 | +$118.00 |
| Total Maintenance Contribution | $333.50 | $118.00 | -$215.50 |
The Cumulative Impact
The $215.50 annual deficit per vehicle is now multiplied across 2.5 million ZEVs currently on California roads. This creates an aggregate annual revenue gap of over $538 million compared to an all-gasoline fleet.
Recent market volatility underscores the urgency of this issue. While ZEV sales represented 18.9% of new car sales in late 2025—a decline from previous highs following the end of federal tax incentives—the cumulative number of ZEVs continues to climb. State officials have noted that as "federal headwinds" remove incentives for buyers, the state is under increasing pressure to find a sustainable, long-term funding model that doesn't rely on volatile federal policy or shrinking gas tax receipts.
The "mileage tax" being studied under AB 1421 is a direct response to this growing delta. Without a mechanism to recover this specific shortfall, the state’s primary maintenance fund is effectively being defunded by the very transition it is encouraging.
