Evaluating Fuel Tax Revenue Impacts of Electric Vehicle Adoption in Virginia Counties: Application of a Bivariate Linear Mixed Count Model

Increasing electric vehicle (EV) shares and fuel economy pose challenges to a fuel tax-based transportation funding scheme. This paper evaluates the fuel tax revenue impacts of such trends using Virginia as a case study. First, a county-level bivariate count model is developed using vehicle registration data in 132 counties from 2012 to 2016. Model results indicate strong correlation between presence of battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) on a county basis. Counties with higher percent of males are associated with higher BEV (but not PHEV) counts. In contrast, higher average commute time is predicted to increase the number of PHEVs in each county, but not BEVs. Greater population density, population over 65, population with graduate degrees, and household size are found to increase PHEV and BEV counts while more households with children is associated with fewer EVs. The analysis forecasts 0.6% to 10% statewide EV adoption by 2025, with an adoption rate of 2.4% in the most likely scenario. Nine scenarios, combining different predictions of EV adoption and fuel economy improvement, project statewide fuel tax revenue to decrease by 5% to 19%, relative to 2016 receipts. Furthermore, though all counties are predicted to experience decreasing fuel tax revenue contribution per vehicle (due to fuel economy improvements and EV adoption), the decrease is more significant in urban areas. Model results predict that on average a light duty vehicle in a rural area will pay 28% more in fuel taxes than its urban counterpart by 2025. The framework proposed here provides a reference for other regions to conduct similar analysis using public agency data in the vehicle electrification era.