Iowa EVs now pay two taxes where gas cars only pay one
Iowa is about to adopt an additional “electric fuel excise tax” on July 1, meaning EVs in the state will now pay “fuel” taxes two different ways, whereas gas cars only pay one – and both of these taxes are higher than what a gas car pays.
A large number of states have implemented misguided and excessive “EV fees” to “make up” for shortfalls in road budgets, with the theory that EVs are somehow skipping out on their fair share. Currently, in Iowa, gas taxes only pay for less than 40% of the state’s road budget, and the vast majority of road damage is done by trucks, not cars.
We’ve covered the reasons these fees are misguided many times before, not least of which because they are a cynical lobbying ploy by the oil industry to disadvantage an objectively better transportation option. But Iowa’s new effort takes the stupidity to the next level.
Iowa double-taxes EVs, and each one is higher than taxes on gas
Iowa’s new EV fuel excise tax, in effect starting July 1, will apply a 2.6 cent tax per kilowatt-hour of electricity dispensed into an EV battery.
Thankfully, the new tax doesn’t apply to residences. But anyone charging at a public or commercial station will now have to pay two taxes where a gas car driver only pays one when they go to a gas station. The other tax is the state’s $130/year registration fee for EVs, which was explicitly intended to replace gas taxes for EVs.
Not only do EVs have to pay twice as many taxes as gas cars do, but each of these taxes is higher than the tax for an equivalent gas car.
At $130/year, an EV is taxed at about the rate of the average 35mpg car, given Iowa’s average 15k miles driven per year. While 35mpg is more than the average gas vehicle, it’s far less than the average efficiency of an EV – most of which are rated at over 100 mpge.
So this one tax is already more than what an EV would pay if it used gas. But on top of that, the 2.6c/kWh is also more than the taxes on gasoline usage. At current average Iowa gas prices of $3.70/gal, the state tax of 30c/gal represents a tax of about 8%. But at average Iowa electricity prices of 14c/kWh, 2.6 cents is an 18% tax, more than double the percentage tax on gasoline.
Per mile, these taxes come out to about .8 cents for EVs and 1.2 cents for gas cars, but remember both that gas cars are taxed based on fuel use not miles (and EVs are much more efficient, so thus should pay much less tax), and that EVs are already paying a tax just for existing.
Finally, there’s even a third source of taxes that some EV drivers pay. Iowa has a “local option” sales tax for utility costs, which means in some parts of the state, electricity is already taxed by an additional 1%. This is a small tax, but it means that EV drivers are instead paying three taxes to the state of Iowa, whereas gasoline users only pay one.
This has nothing to do with road damage
Governments have attempted to justify these abusive taxes by claiming that EVs are causing road funding shortfalls that need to be filled. But Iowa’s EVs cause virtually none of the road damage in the state.
Iowa has 4,596,501 gas vehicles registered as of 2022, and as of April of 2022, had 9,400 EVs registered.
If these EVs drive the same amount as the average Iowa driver, that means they’ll pay about $1.1 million in EV fuel excise tax per year collectively. But Iowa’s Department of Transportation has a $4 billion budget, meaning this new tax will represent ~.027% of its total. At Iowa average road construction costs, this would pay for somewhere around 30 lane-miles of road construction. Iowa currently has a total 235,460 lane-miles of road.
Meanwhile, a fully-loaded semi truck does roughly 10,000 times more damage than an average passenger vehicle. These trucks are driven more miles, too, with an average of around 45k miles per year. So if a $130 tax is reasonable for an average 15k-mile/yr EV, then a $3,900,000 yearly tax should be reasonable for a truck that does 30,000 times as much damage. If one of those numbers seems high, then both of them should.
Besides, less than 40% of Iowa’s roads are paid for by gas taxes, with the majority coming from other tax sources – which EV owners already pay their fair share for.
If we want to argue that “fairness” in paying for road damage is what’s important, then all vehicles should pay an equivalent tax based on weight and mileage regardless of motive power (and additional taxes for the amount of pollution their operation causes as well).
Until then, this is not an issue of fairness – it’s an issue of wealthy fossil lobbyists trying to disadvantage a superior powertrain choice while its numbers are still small and there are few people to complain, with the goal of continuing to choke you to death with the effects of their product.
What’s actually costing Iowans more? Pollution
What actually does have drastic costs for Iowans is pollution. The IMF has estimated that fossil fuels cost the US $649 billion in health and environmental costs per year, and if we assume those costs are distributed evenly across the US population, that would mean Iowa loses about $6 billion due to fossil fuel pollution per year.
Much of that damage comes from automobile exhaust. Transportation is the largest-emitting sector in the US, and car exhaust is responsible for more smog-forming pollutants than any other source. We know that EVs can reverse those trends, and even a small amount of EVs can make areas healthier and that every electric car brings $10,000 in life-saving benefits.
And that doesn’t even account for the benefits of avoiding climate change, which will disproportionately affect the agriculture industry (Iowa’s most important industry) and where quick action could save the world tens of trillions of dollars.
But putting a dollar amount on those costs abstracts them and makes them feel less harmful. Those health costs aren’t being paid by your pocketbook, but by your lungs. It’s a shockingly big number, but it’s a number representing an even more shocking amount of misery foisted on you by the fossil fuel industry which has lobbied for these punitive taxes on its better competition.
The number obscures the misery of thousands or millions of Iowans with reduced quality of life, children whose possibilities will be limited by lifetime lung problems before they even get started with their lives, retirees who can’t enjoy their well-earned leisure due to visits to the doctor or being leashed to cumbersome medical devices, or the thousands per year whose lives are cut short from the poison we continue pumping into their lungs.
And with this law, Iowa is throwing its lot in with increasing the misery of its residents. Placing an abusive tax on a small number of those residents who’ve made a better choice and are being punished for it, making better choices less attractive, and harming its residents and its main industry in the process.
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The next generation of electric vehicle batteries will be here sooner than expected. After opening the first-of-its-kind pilot plant for its all-solid-state EV batteries this week, SK On said it plans to bring the breakthrough battery tech to market ahead of schedule.
SK On’s all-solid-state EV batteries will be here in 2029
If you haven’t heard it by now, all-solid-state EV batteries are viewed as a potential game-changer, promising to unlock longer driving range, faster charging times, and better overall performance than the lithium-ion batteries used today.
Although the new battery tech shows promise, producing it on a large scale has not been so easy. That could soon change, according to leading global battery maker SK On.
After opening its new pilot plant in South Korea on September 15, SK On said it will bring all-solid-state EV batteries to market a year ahead of schedule.
SK On now plans to commercialize its ASSBs by 2029. Initially, the company aims to launch the batteries with an energy density of 800 Wh/L. Looking further out, SK On said it plans to offer all-solid-state batteries with an energy density of 1,000 Wh/L.
During the opening ceremony, SK ON’s CEO, Seok-hee Lee, said, “This pilot plant will serve as a cornerstone for SK to leap forward,” adding the company remains “at the forefront of commercializing all-solid-state batteries.”
SK On said the 4,600-square-meter (50,000 sq ft) facility utilizes its own unique “Warm Isostatic Press (WIP)-free” process, the first to employ this technology in Korea.
By applying pressure to electrodes at higher temperatures, SK On said its WIP process improves density and performance.
A WIP tech is a process that applies pressure to electrodes at higher temperatures to improve density and performance. However, since it requires a cell-sealing process, it isn’t easy to produce at a mass scale.
SK On said its unique cell design addresses the issue while reducing resistance within the electrodes. The company also improved the bonding between electrodes and solid electrolytes, resulting in “smoother ion transport, more stable charging and discharging, and longer cycle life.”
The all-solid-state pilot plant is located at the SK On Institute of Future Technology in Daejeon, which is about 150 km from Seoul. Several high-profile executives attended the event, including Andrea Maier, Head of Solid Power Korea. SK On and Solid Power teamed up last year to accelerate the promising new battery tech.
SK On will build prototypes at the facility to test quality and performance ahead of mass-scale production. The new pilot line will mainly be used to develop all-solid-state batteries, but SK said it will dedicate some lines to lithium-metal batteries as well.
The battery giant filed patents for its unique new technology in South Korea and internationally. SK On is one of the many battery manufacturers, automakers, and other startups chasing the “holy grail” of EV batteries.
Mercedes-Benz, BMW, Volkswagen, Toyota, and Nissan, to name a few, are developing solid-state EV technology. Leading battery makers, including CATL, BYD, and LG Energy Solutions, are also planning to bring the new tech to market.
Just last week, Mercedes-Benz announced it drove a modified EQS, equipped with solid-state batteries, for 1,205 km (750 miles) on a single charge. And the EQS still had 85 miles of range remaining.
Which company will be the first to launch solid-state batteries on a mass scale? According to SAIC MG, the new MG4, launched last month, is “the world’s first mass-produced semi-solid-state” electric vehicle. It starts at just 99,800 yuan ($14,000) in China.
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NHTSA has launched an investigation into Tesla over potential malfunctions of its door handles, resulting in people being stuck in the cars.
Tesla uses frameless doors with electronic door handles. The button to open the doors first causes the window to lower slightly, allowing the door to open. Then, it electronically unlatches, enabling the door to be swung open.
There’s also a manual latch, but it has been known to be somewhat hard to locate for people who didn’t read the owner’s manual, which is most people.
If there’s an electronic failure, especially after a crash, it can result in occupants having issues exiting the vehicle when they are in a state of panic.
Now, the NHTSA says it has been notified of electronic door handles that may cause a potential issue, specifically with the 2021 Model Y.
The automotive regulator claims to have received nine reports of parents being locked out of their vehicles when going to get their children in the back:
The Office of Defects Investigation (ODI) has received nine Vehicle Owners Questionnaires (VOQs) reporting an inability to open doors on Model Year (MY) 2021 Tesla Model Y vehicles. The most commonly reported scenarios involved parents exiting the vehicle after a drive cycle in order to remove a child from the back seat or placing a child in the back seat before starting a drive cycle. In those events, the parents were unable to reopen a door to regain access to the vehicle. Four of these VOQs reported resorting to breaking a window to regain entry into the vehicle. Although Tesla vehicles have manual door releases inside of the cabin, in these situations, a child may not be able to access or operate the releases even if the vehicle’s driver is aware of them. As a result, in these instances, an occupant who remains inside a vehicle in this condition may be unable to be rapidly retrieved by persons outside of the vehicle. Entrapment in a vehicle is particularly concerning in emergency situations, such as when children are entrapped in a hot vehicle. For awareness, NHTSA has a Child Heatstroke Campaign that highlights the dangers to children entrapped in hot vehicles.
Tesla reportedly changed the 12-volt battery in the cars involved in those reports, but NHTSA is concerned that there were no warnings that the 12-volt battery was about to fail, which the agency says can be dangerous.
While there’s a process to get the doors unlocked in this situation, NHTSA beleives it might be too complicated and not accessible enough:
The Tesla Owner’s Manual “Jump Starting” and “Opening the Hood with No Power” sections describe a multi-step process for restoring power to the electronic door locks in order to enable their operation from outside of the vehicle. This process requires applying 12 volts DC from a separate power source to two different points accessible from the vehicle’s exterior. The subject incidents suggest that this process may not be readily available to owners or well known. For instances where an occupant is able to access and operate interior door handles, the Tesla Owner’s Manual “Opening Doors with No Power” section identifies the manual door releases inside of the vehicle’s cabin.
The investigation is currently specifically about the 2021 Tesla Model Y, which includes a population of about 174,290 units in the US.
NHTSA’s inquiry has launched after Bloomberg released a report about the issues that come with electronic door handles. The report was about the broader use of electronic door handles in the auto industry, but it specifically highligthed Tesla due to its extensive use of the technology.
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It’s a simple fact that SUVs and crossovers have out-Darwined the station wagon. And, sure – the taller driving position offers road presence, but when it comes to real-world utility, a proper long-roof wagon can hang with the best of them while offering Teutonic driving dynamics no SUV can match. All it would take to spark a wagon revival in the US is one sleek, solidly built, and affordable entry from a mainstream brand. And VW already has the perfect candidate waiting in the wings. Meet the Škoda Vision O (Passat badges not included).
Volkswagen has spent the last three decades chasing a premium image that nobody (least of all Audi) seems to want it to have. The results speak for themselves, and VW dealers in the US have been struggling to move the brand’s $70,000 ID.Buzz minivan and Arteon – heck, the ID.7 didn’t even make it to showrooms before VW pulled the plug. Now, just as VW is set to re-launch the Scout brand with fresh, relatively accessible new products in high-demand markets, frustrated franchise dealers are suing for the right to sell Scout-branded pickups and SUVs.
What if Volkswagen corporate gave those frustrated dealers an olive branch? Something true to the brand, with a little brand heritage, that was genuinely compelling? Something like a new electric station wagon with a familiar name and a starting price tag somewhere south of $39,999.
That’s where the new Škoda Vision 0 could come in as an affordable, practical, and stylish wagon that could spearhead a return to the sort of people’s car identity that Volkswagen of America so desperately needs.
Be not afraid
When Volkswagen brought its Space Vizzion concept to the LA Auto Show a few years back, they called it a lot of things, from an SUV to a sporty crossover – but they were clearly afraid to call it a wagon. Office lore even has it that Seth Weintraub, the Blogfather, kept going around to the VW people saying, “Nice wagon you’ve got there!” and none of them laughed.
If you ever needed proof that VW’s American brand people had lost the plot, that might have been it. But the lukewarm reception they got for the low-riding long-roof VW with a luxury price tag convinced them Americans really didn’t want wagons.
By and large, that may be true. But VW is hovering around “just” 4% of US market share, and I’d bet that a lot of those four-percenters are buying VWs because of their fond memories of their old GTi or VR6 Jetta – not because they’ve bought into Volkswagen’s premium brand ambitions.
As it turned out, no one else seemed to like the ID.7 production version Space Vizzion that much, either. But, in classic VW fashion, the problem isn’t their product. To them, the problem is everyone else. And, frankly, it’s just not.
Vision 0 Concept
In Europe, Škoda is positioned as a value brand. Not cheap, per se – but not a luxury or status brand, either. Exactly how VW is still seen by many millions of Americans. If Volkswagen of America would be willing to wear that hat again, a re-badged Škoda (part of VW Group) could fit the bill. Here’s how Škoda’s CEO sees the wagon, itself:
At Škoda, our commitment to our customers – who have trusted us as leaders in the estate segment since 2016 – drives us to deliver the Vision O: a blend of innovative design, over 650 Liters of luggage space, autonomous driving capabilities, and an intuitive AI assistant. This vehicle transforms every journey into an effortless, empowering experience while advancing our sustainability goals and elevating our modern, solid, design principles.
KLAUS ZELLMER
Škoda brand CEO
Sounds great. And, built off of something like the ID.4’s SSP (Scalable Systems Platform) with the same specs as the ID.4, it could easily match that vehicle’s ~209 miles of range from the RWD, 62 kWh version, or 263/291 miles from the 82 kWh AWD/RWD versions.
On a lower, sleeker wagon that’s punching a smaller hole in the air? An SSP-based Passat wagon could even hit that magic “300 mile range” number. With the ID.4’s $40,000-ish price tag, I think that would be a real winner – at least in the context of VW’s Arteon, that sold just 5,500 units in its best year (2021).
I think VW could expect to sell 20,000 of them comfortably – putting them ahead of something like a Cybertruck in terms of outright sales and, hopefully, reminding the company’s marketing people of something they knew inherently back in the mid 1990s when they brought back the New Beetle: a halo car doesn’t have to be expensive, it just has to be loved.
People would love their Passat wagons.
That’s my take, anyway – but I’m sure I’m missing something. If you can think of a reason why a stylish electric station wagon from Volkswagen aimed right at the heart of the middle class wouldn’t make for a solid halo car, scroll down to the comments section and let me know what it is.
Original content from Electrek.
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