A Future Without the Highway Trust Fund?
Electric vehicle ownership saw its biggest single year increase in 2023, and that trend is expected to continue, along with the decline of fossil fuel tax revenue. There's a ticking clock in Washington: The IIJA expires in 2026. Then what? For the first time in history, an electric vehicle (EV) is the best selling vehicle in the world for 2023. The Tesla Model Y dethroned the long-standing king of car sales, the Toyota Corolla. While in the U.S. market, things look a bit different, with Ford's F-series trucks continuing to outsell every other make and model, two of Tesla's offerings are in the top 10. The Model Y hit number four in America through the final quarter of 2023. This is a milestone change in the North American car buying habits, but that's only half the story. While it's true that EV cars are making news, the bigger reality that isn't making as many headlines is that the fastest selling electric vehicle in the U.S. is electric bikes. According to an article in Business Insider by Tim Levin, "In dollar terms, e-bike retail sales nearly quadrupled in the past four years, rising from $240.1 million in 2019 to $885.5 million in 2022." These trends impact the primary product of the asphalt road building industry in a few ways:
- EV cars and trucks don't pay gasoline or diesel related taxes, essentially using federal roads for free.
- If the funding problem is not resolved in such a way that shortfalls aren't met, it could mean fewer available dollars and less work for contractors.
- EV cars and trucks are significantly heavier than their traditionally fueled counterparts, due to the size and weight of their batteries, which means they are putting more wear, tear, and stress on roads while not paying into the fund that maintains them. This could result in complex changes in the way pavements calculate wear potential overtime, as well as overall resiliency.
- Although E-Bikes place virtually no strain on the physical integrity of roads, and actually contribute to a reduction in vehicle miles traveled (VMT), building infrastructure to support them requires planning and local support that can be sometimes difficult.
Background on the Highway Trust Fund: The Federal Highway Administration's (FHWA) highway trust fund (HTF) gets its funding primarily through the taxes on fossil fuels. You pay it at the pump. These fund are what pay for the big infrastructure and road projects that make up a not-insignificant portion of contractors' state and federal work.
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